Get a travel loan by shopping for unsecured loans. Also called personal loans or signature loans, these loans involve borrowing money without putting up any collateral. LendingTree personal loan offers allow you to shop for your best rates and terms for personal loans up to $100,000. Before borrowing, however, you should also consider alternatives — such as budgeting and saving or utilizing 0% interest or travel rewards credit cards — that might better suit your situation.
If you’re hoping to go on a vacation but have limited funds, you may consider taking out a loan to cover costs. Travel loans (or vacation loans) are personal loans that aren’t secured by collateral, like your home or car. You can choose a loan of a specific amount with a fixed interest rate and regularly scheduled payments of the same amount.
|Travel loans, by the numbers||Finding and choosing a travel loan|
|4 lenders offering vacation or travel loans||Pros and cons of taking out a travel loan|
|Vacation financing: Tips for success||How much does a travel loan cost?|
|Alternatives to taking out a travel loan|
Many reputable banks, credit unions and online companies, such as those listed below, lend personal loans for traveling or vacationing.
Fortunately, too, there are lenders with varying eligibility criteria in case you don’t initially qualify. Just keep in mind that the lower your credit score, the likelier it is that you might have trouble gaining loan approval or netting a single-digit APR.
Applying with a cosigner or co-borrower who shares responsibility in repayment is one useful way to get lender acceptance if you have trouble qualifying independently.
|Lender||Min. Credit Score||Best For...||APR Range|
|Upstart||300||Borrowers with thin credit histories||6.70% - 35.99%|
|Prosper||580||Fast loan funding||6.99% - 35.99%|
|SoFi Bank||680||Unemployment protection during repayment||8.99% - 23.43%|
|Best Egg||580||Seamless online prequalification||8.99% - 35.99%|
|Fast funding: |
You won’t have to miss special events, like a wedding or family reunion.
It’s not advised to pay interest on unnecessary expenses — and with a vacation loan, you’ll owe interest.
|No collateral: |
If you default on the loan, you won’t risk losing an asset like your home or car.
|Debt burden: |
When you open a personal loan, you’re taking on debt. Short vacations might not be worth the long-term debt.
|Comparative affordability: |
You may be eligible for a lower APR compared to those on a credit card, potentially saving you money.
|Associated risk: |
If you can’t repay the loan, you could ruin your credit.
Like other personal loans, vacation or travel loans are tagged with APRs that vary according to the strength of your application. If you have good or great credit and a solid or better debt-to-income ratio, you could access a lower APR — this accounts for the interest rate and loan fees charged by lenders.
APRs for travel loans can range from around 5.00% to as much as 36.00% among reputable lenders. Even small differences in APR can mean a large difference in the cost of your loan.
Let’s say you’re borrowing a $10,000 travel loan and plan to repay it over a three-year period. Here’s how much APR could affect the total cost of your repayment.
|Loan duration||36 months||36 months|
|Total cost of the loan||$11,281||$12,657|
|Total interest paid||$1,281||$2,657|
Once you receive quotes for travel loans, estimate your monthly dues and total repayment costs using a loan calculator.
Shop and compare loan costs online using LendingTree. Compare APRs, fees and loan terms to find an affordable vacation loan.
Build your credit before applying for your loan to get favorable terms. Subprime borrowers will pay more for a personal loan because of high APRs — check your credit score using My LendingTree to see where you stand.
Determine exactly how much you need — and how much you can afford — to borrow. If the loan is too small, you could fall short on unforeseen costs that crop up. But if it’s too large, you may end up paying interest on money you never needed to borrow.
Keep in mind that your travel loan must be repaid. Create a budget for your trip to cut back on impulsive purchases and extravagant activities that are out of your price range.
Choose a destination you can afford. Better yet, travel during the off-season so you can save money on flights, hotels and activities that cost more during peak season.
As a rule, you shouldn’t take out debt for unnecessary expenses like travel. While personal loans may present a better option than credit cards due to potentially lower APRs in general, it’s still best to pay for vacations in cash. This might require discipline and budgeting for months in advance, but it ensures you aren’t paying interest on your trip.
TIP: Route a certain amount of money per paycheck into a high-yield savings account to save up quickly while accruing interest.
Use a rewards credit card for everyday purchases to earn airline miles, hotel points and cash back. Many credit cards offer special rewards programs for people who like to travel. For example, you could get double bonus miles for buying a plane ticket through a certain airline. Just be sure to pay off your balance in full to avoid paying interest.
TIP: Many travel credit cards offer sign-up bonuses, such as earning 20,000 bonus miles for spending $1,000 within the first three months of opening your account.
Personal loans and personal lines of credit are pretty similar products. The difference is that a personal line of credit offers more flexibility, which could make it a better option for financing a trip. While personal loans have a fixed term and fixed interest rate, personal lines of credit allow you to borrow money on an as-needed basis. Interest rates are variable, but you only pay interest on the balance you carry.
TIP: You can also open a secured line of credit, like a HELOC, to potentially get a lower APR on your travel financing.
If the company you’re paying for travel costs works with a third-party service like Affirm or Klarna, “buy now, pay later” financing could be a useful alternative. These services are typically light on fees and may not charge an origination fee, like some personal loan companies will include on your bill. Though each company’s service is unique, “buy now, pay later” typically breaks up significant purchases into smaller installments or payments that you could repay over time. Just be sure you’re not abusing the “buy now, pay later” approach for expenses you can’t actually afford.
TIP: Whether your biggest travel expenses are flights, rentals or something else, check with the provider to see if it offers a “buy now, pay later” option, and read the fine print to ensure it’s an optimal alternative to a travel loan.