How to Get a Vacation Loan

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pier-440339_640Most people don’t think about taking loans out for their vacation and discovering exactly where is NYC, because they’re using loans for things like college educations, homes and cars. But it’s a perfectly legitimate way to go if you don’t have a lot of other major expenses and you know you’ll be able to pay it back. Though, really not many people fall into that category.

Vacations add up after a while, and it can be incredible just how much those tours, meals, late-night drinks, speeding tickets (although dismissible by taking a defensive driving course), will end up costing. So, if you happen to be dead set on going to one of the more expensive places in your budget, keep these tricks in mind.

The Debate

On the one hand, you’ve got a lot of responsibilities. You may have a car payment, car insurance, phone bills, and a mortgage. On the other hand, it’s freezing where you are and not freezing in places to the South of you. On the one hand, you may get sick later this year and lose your source of income. On the other hand, your city doesn’t have a roller coaster next to an ocean. Maybe you’re planning a wedding soon or want to have a child in the future. On the other hand, if you don’t get a helicopter ride over the Grand Canyon, is life really worth living? These are just a few of the major concerns you should have you on your mind before you go about getting your vacation loan.

Credit History

A loan is a loan, so you probably saw this coming. You can probably just file this under any type of personal loan, thought there are companies that specifically will make loans for travel. Your credit score will be just one factor they’ll look at before you’re granted the loan. They’ll also look at things like your collateral and general assets. There is one major warning about all this: taking out a vacation loan is going to increase the amount of debt you have, and it will likely end up costing more than you think if you can’t pay it off in a timely manner. So, that means that if you’re borrowing a loan of $5,000 at 12%, you’ll end up paying close to another $1,000 if you take the maximum amount of time to pay it off. That sounds like a raw deal to us, and perhaps not worth going to Spain for. You may even get a better deal through your credit card, depending on your carrier.

Can You Pay?

This is a pivotal question to ask before you sign on the dotted line. Because chances are, if you’re going for a vacation loan, you may not be the best at managing your finances. Which can likely make things pretty awkward when you think about the rest of the bills that will add up over time in addition to the one that made your skiing dreams come true. Maybe you don’t care that only 2% of those who take out personal loans say they do it to finance their vacation. You do your own thing, regardless of how society tells you to live your life. While we support that, there are a lot of reasons why Americans as a whole own an astonishing level of debt, and vacation loans certainly aren’t helping. In the end, you’ll likely get someone who can help you get a loan, even if you must borrow at ridiculously high rates. It’s not so much a question of how to but a question of should you.

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