Now that people are getting more comfortable traveling thanks to the distribution of the vaccines, you may be wondering about going on vacation whether it is with your friends or family. You probably have saved money from all these past months that you couldn’t travel, but if not, you may be thinking about getting a vacation loan that can cover it all.
Depending on the amount of cash that you request, and if your budget allows it, you can actually pay for all of your trips, from transportation to accommodations and food.
You need to be careful though since vacation loans can come up with high-interest rates and fees. They also require you to keep paying for the loan after you have traveled.
In today’s article, we will explain to you what a vacation loan is and if you should pay for it.
A vacation loan is just a personal loan that you use to pay for your trip. When you go to a lender to request a loan, you can simply ask for the previously mentioned online lenders or any other lending company will understand. As part of the personal loans, you need to repay the borrowed money with monthly payments.
Now, this is an unsecured loan, which means that you don’t need to use collateral to request it. It also means that the interest rates will be higher than for example mortgages.
If you want to qualify, you need to understand that lenders will follow the same procedure during your loan application when you are borrowing money for this purpose.
Vacation loans work like any other personal loan that you find out there. You borrow money from $1,000 up to $100,000 depending on the lender, and you can repay them in 2 or more years. Of course, if the amount is not big enough and your monthly income allows you to pay more, there are shorter repayment periods so you can pay up your loan early.
On the other hand, you will find that interest rates can be as low as 5% or as high as %36. Since it’s an unsecured loan, fees and interest can’t be compared with other loans, like student loans, for example. As for advice, you have to know that requesting a loan for this holiday purpose will increase the overall cost of the trip.
So, how do you know if a vacation loan is for you?
It may be worth it if you’re financing an important trip and you ran out of savings for transport, insurance, accommodations, or food. It could also be worthwhile if you have a business trip where you can get benefits.
Fixed monthly payments
Using a personal loan to finance your vacations allows you to have a fixed number of payments. Borrowers will need to make the payment on the due date and finish it in the period that you agree with the lender.
Consumers can acquire the flights for their vacations in advance using a loan if they don’t have money. However, if you want it to be a discount, the fees, and interest that you will pay need to be lower than the costs of your flight and the rest of your vacation.
Possibility of getting lower interest rates
If you have a good credit score and no debt, you may be able to get lower interest rates when you are requesting a loan and save money over time.
Potentially increase the price of the trip
If you plan to purchase the trip with a loan, you may increase its value by paying interest over time. For example, if you request a loan of $5,000 at a 12% interest rate, you would be paying $979 in interest to the lending companies.
Fees can make the loan more expensive
To fund you, some lenders could charge you with some fees, like origination fees or prepayment penalties. This could make the loan potentially expensive. So you should look for lenders that don’t have too many fees.
Lower credit score
A vacation loan could lower your credit score if you aren’t able of paying it back on time and your income doesn’t allow you to do it. This could harm your credit score for future loans. The best thing you could do is budget and analyze what are your expenses and then request the loan based on what you can afford.
Added stress for monthly payments
Financial services could increase your daily stress if you find yourself with problems paying them back. So, even though vacations should be taken to relieve stress, you could end up adding more of it to your life.
- Go to our website’s loan application.
Here in Flash Financial Guide, you have an easy loan application that you can fill up to get in contact with several lenders all around the country. This will help you speed up the loan process and won’t take as many credit checks as should take if you do it yourself.
You will need to complete the information with financial details so lenders can have that in mind when they are making a decision.
- Wait for an answer from a lender.
Once a lender receives our application with your information they usually take a few hours to give you an answer via Email. All you need to do after filling the loan application is waiting for it.
However, it can take up to 24 hours to get an answer, and the lender could request more information from you.
- Close the agreement and receive the funds.
Once you are approved, you need to check the loan contract to see if everything is correct. Don’t hurry, read it at your pass and then sign it and send it back to the lender.
After that, it should take one business day to receive your funds on the bank account that you added to the loan application.
Going on vacation is something that we all want to do from time to time. It’s obvious that you may want to leave the daily stress of work and wake up in a bungalow in the Bahamas. Things complicate when you don’t have enough money to do it, even checking your online banking. This is the time when a personal loan for vacation is a good option.
However, as a financial instrument, a loan gives you obligations that you need to fulfill so you don’t harm your financial situation in the US. Be sure that you can pay off the amount of money you’re requesting so you don’t have a problem with debt later.
Flash Financial Guide can help you solve this problem. Read our blog and learn more about finance, so you can know when to request a personal loan or not.