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Would you like to soak up a Bahama sun or try your skills on the ski slopes? Maybe you would prefer to snorkel, surf, and zip line. Is visiting a famous museum your version of paradise. You can make it happen by taking out a Vacation personal loan.
If you need to secure a loan for a Vacation, you can benefit by choosing personal loan companies that specialize in this type of lending product. A personal loan for Vacation will enable you to take that dream vacation early or to get away from the chill of a cold and glacial winter’s day. You don’t have to worry about the winter blues when you can access a personal loan online – one specifically geared toward your next getaway.
What Is a Vacation Loan?
A Vacation loan is a loan you can take out to fund a dream trip or holiday. You can use a Vacation loan to increase your opportunity for travel and to experience new and exciting adventures. For example, you can use a Vacation personal loan to explore places, such as:
European cities, such as Rome, London, and Paris
African destinations, such as Nairobi, Kenya, and South Africa
Australian getaways, including Sydney and Brisbane
U.S. cities, such as Los Angeles, Denver, Las Vegas, and New York
Would you like to take a themed vacation? If so, you can use the loan proceeds of a Vacation loan to help you do just that. For example, maybe you would like to go on safari in Africa. Maybe you would like to take a river cruise down the Seine or enjoy the culinary delights featured in Paris.
Whatever your reason for applying for a Vacation personal loan, it will broaden your world and give you a chance to escape for a while from everyday life.
Use a Vacation loan to pay for airfare, a cruise, or travel packages. The money can go toward a rental car, accommodations, and food. You can also use the money to enjoy certain sites and attractions. Before you take out the loan, you just need to know how much you will need for your trip.
Vacation Loan – How to Get Started
To apply for a Vacation personal loan, you will need to take the following steps.
Check Your Credit Score. When you apply for any type of personal loan online, you need to review your credit score first through the 3 credit bureaus. Because your loan for Vacation is primarily based on your credit score, knowing the score will determine what APR you will be charged.
Select Your Loan Type. Some companies specialize in Vacation loan funding, so it is better to go through them if you want the best rates for this loan type.
Get Prequalified for Vacation Loan Financing. When you choose several lending providers you like, you will need to get prequalified for your Vacation loan next. Doing so will give you the repayment details and terms for your Vacation personal loan. If you agree to shorter loan terms, you can also get a lower fixed APR.
Compare the Lenders. After you have had a chance to get prequalified through different Vacation loan funders, you can review their loan terms and APRs, and see which one fits best with your lending or personal finance requirements. For a Vacation personal loan, go with a lender that offers the lowest APR and features the lowest fees over the term of the loan.
Supply the Necessary Info and Documents. When you choose a lender, you will need to provide the required loan paperwork and information for Vacation loan funding. In this case, you need to supply the following details and documents:
Personal Identification (Social security card, passport, or driver’s license)
Proof of earnings or income (W-2s, paystubs, or filed tax returns)
Employer information (Name of company, manager’s name, and phone number and address)
Proof of residence (utility bill with your name and address or a lease agreement)
Apply for the Loan and Start Making Payments. After you apply for your Vacation personal loan and start making payments, you might add some extra money to your payment each month to repay the loan faster. Doing so will make the loan repayment smoother and easier.
Vacation Loan Financing – What You Need to Know
To take out a Vacation personal loan, you should be aware of the following terms:
Annual Percentage Rate (APR) – The rate of interest charged on a Vacation personal loan, expressed at an annual rate.
Application Fee – The amount a lender charges for processing a Vacation loan application and the related documents. These fees are usually non-refundable and may or may not be included in processing a personal Vacation loan.
Debt-to-Available Credit Ratio – When considering you for a Vacation personal loan, a lender may look at your debt-to-available credit details. This represents the money you owe compared to the credit available through credit lines and credit cards. Therefore, the debt-to-available credit ratio shows how much available credit you are using. The higher this percentage, the riskier you appear to a lender.
Debt-to-Income Ratio – The percent of your monthly pre-tax income that is being used to pay off debts, such as auto loans, credit cards, and student loans. Lenders assess 2 key ratios. The first ratio is a front-end ratio or the percent of monthly pretax earnings spent on your house payment. The second percent is a back-end ratio or the other debts that are factored into the house payments.
Late fee – A fee charged customers who take out a Vacation loan who pay a payment late or pay less than the required monthly amount.
Late Payment – A delinquent payment or a failure to pay on a Vacation loan before the agreed due date. A late payment can hurt your credit score for as long as 7 years.
Vacation Loan Lender – The financial institution that provides a Vacation loan for paying for a vacation, planned tour, or group trip.
Net Income – Your income after taxes have been deducted. It is also called your take-home pay. This is the amount considered by a lender when assessing your ability to repay a loan amount.
Prepayment Penalty – A fee charged by a lender when a borrower pays off a loan before its scheduled term. Usually, prepayment penalties are not applied by standard lenders. If you are taking out a subprime Vacation loan, you need to read the loan terms carefully, as this fee may be applied.
Principal – The amount of money owed on a loan, excluding the charged interest or APR.
Risk Score – Another name for a credit score.
Subprime Borrower – Some people who request funding for a Vacation loan may be subprime borrowers. A subprime borrower usually has a poor credit score because of late payments or collection accounts. Lenders evaluate and grade subprime borrowers on the degree of past collection problems – A to D, or lower. Subprime borrowers can qualify for a Vacation loan but at a higher interest rate.
Utilization Ratio – A ratio that shows a lender how much available credit you are using.
Unsecured Loan – Most personal loans online, or Vacation loans, are not collateralized. Therefore, they are not secured with a form of collateral, such as a house or car. The lender assesses the borrower’s ability to pay primarily on their credit score.
Recommended Vacation Loan Lenders
SoFi (pronounced SEW-fi, which stands for Social Finance) provides a quick application process and easy-to-use platform for anyone seeking the ultimate in Vacation loan financing. Their low-fee personal loans make them an excellent choice for anyone interested in taking out a Vacation personal loan. You will also like SoFi’s unemployment feature, which allows you to defer loan payments if you become unemployed or get laid off. They also offer lower rates than many personal loan providers of Vacation loan products. You can finance up to $100,000 on the SoFi website, so if you want to travel around the world, it may be possible.
Lending Tree does not provide direct funding for Vacation loan products. Rather, the company provides a listing of third-party lenders that offer personal loans for the costs related to traveling. You can obtain Vacation financing easily through Lending Tree, as the site does not require a perfect credit score. Moreover, all types of credit ratings are accepted on the site. Use the platform to compare Vacation loans, so you can find a loan product that will best fit your budget.
Best Egg is a lending source that makes it easy to get qualified for a Vacation loan online. The lending provider offers personal loans for relocating at fixed APRs. Therefore, you can receive funding from Best Egg easily and conveniently. Simply visit the site and check their best rate for Vacation loan financing. You can get approved for a Vacation loan on the site for $2,000 to $40,000. If you are planning that dream vacation, this is a site to check out.
Credible allows you to compare rates for several Vacation loan packages by using one easy-fill application. The Credible website is therefore an excellent resource for Vacation personal loans, making it a good choice for any globetrotter or adventure seeker. Customer testimonials rank the provider high in customer service as well. Keep in mind that you will eventually be matched with a third-party lender, so you do need to carefully evaluate the terms of each Vacation loan you consider. The site also offers the best rate guarantee. If you do not secure the best loan rate possible for your Vacation loan financing, it will pay you $200.
Upstart represents a lending website that gives anyone seeking a Vacation loan a fast way to receive the money. The loan process is fast, and several factors are considered when deciding on loan approval. These criteria include the applicant’s credit score, job history, income, and educational background. The site describes how their loans work, thereby answering any questions customers may have about a Vacation personal loan or similar type of funding. You can also receive financial education on the lending platform – good to know if you have not taken out a Vacation personal loan before.
FAQ on Vacation Loans
What type of credit score do I need to get a Vacation personal loan?
The good news is that you don’t need a high credit score. You can get a Vacation loan product with even a low credit score.
How do I pick out a lender for a Vacation personal loan?
Review at least 3 or 4 personal lenders online that feature Vacation personal loans. Choose the lender who can give you the best rate who does not assess a prepayment penalty.
What criteria are used to fund a Vacation personal loan?
What you pay in monthly installments for a Vacation personal loan is based on your debt-to-payment ratio, or how much debt you have concerning what you are paying for credit, your credit rating, payment history, credit utilization, earnings history, and salary.
Will I need to come up with a down payment for a Vacation personal loan?
A Vacation personal loan is unsecured. This means you can apply for funding based solely on your credit score and that you won’t need to place any money down.
What types of Vacation personal loans are featured?
You can fund a Vacation personal loan with an unsecured or secured personal loan. However, if you use collateral to take out a Vacation loan, or secured loan, it is much riskier. Most people take out personal unsecured loans online, as they will not have their asset (collateral) seized if they cannot make payments.
What should I expect to pay in interest for a Vacation personal loan?
The interest charged on the principal for a Vacation personal loan hovers between 12% and 18%, on average.
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