Should You Get a Personal Loan to Travel?
Travel loans or using a personal loan to travel can be an option if you don’t have the money sitting in your bank account.
Many times we try to save up for an exotic dream vacation or trip from our bucket list to come up short.
Today we are going to break down the reasons why it might make sense to use personal loans to travel.
Reasons to Use Personal Loans to Travel?
1. If you have good credit a personal loan can give you a better rate than a credit card.
2. Credit cards have revolving interest charges with no end date. By getting a personal loan to travel, you have a fixed payment with an end date.
3. With personal loans you also get a fixed interest rate. Credit card interest rates can fluctuate and rise.
4. Personal loans work great for travel as they offer higher amounts to cover the entire trip. Many unsecured personal loans go up to $40,000.
5. By getting one fixed interest payment with an end date to the loan, it allows you to work the payment into your budget and you know when it will be paid off.
What Are The Best Options for Personal Loans for Travel?
You can get personal loans online that you can use as travel loans. These are unsecured personal loans and can go all the way up to $40,000.
Only take out the amount you really need as you will be paying interest on this personal loan.
Two options you can utilize are Peer-to-peer lenders or a lending network.
A peer-to-peer lender or P2P loans as they are sometimes referred to, are funded by individual investors who are looking to lend to borrowers for a slightly better interest rate than they could get in a savings account.
The peer-to-peer lending platform allows you to fill out one simple form online over their site and then get a rate quote for your unsecured personal loan.
Once you accept the terms then the loan will be funded. Once it is funded you will receive the money via direct deposit to you account.
For peer-to-peer loans we recommend the largest P2P lender. You can apply online over their website at LendingClub.com
The next options for taking out a personal loan to travel is using a lending network. This is a lending platform that has multiple lenders including banks and peer-to-peer lenders. They will basically compete for your business.
You just fill out one simple form and they will match you to lenders to find you the best rate and terms.
We recommend PersonalLoans.com
How to Use a Travel Loan Responsibly When Planning Your Trip
Make sure you budget your trip only to what you can afford to pay back. A personal loan used responsibly can not only be a great way to fund an awesome trip, but it can help build your credit if paid back on time.
When using credit cards to build travel miles or cash back during a vacation the balance can become large and expensive with the higher interest rates.
It may seem to make sense at the time and might have benefits like travel insurance. Remember you can always use the credit card on the trip and then apply for the personal loan to pay the credit cards off.
The opportunity to take a trip with a friend may come up at the last minute. Using a personal loan may seem like a great idea if you don’t have the money.
To limit the size of the personal loan, use any savings first to avoid interest on the personal loan. Try to pay the loan down quicker by making larger payments.
This can reduce the interest being paid on the personal loan over time and most personal loans have no pre-payment penalty. Check the details of your loan just to make sure, but most do not charge a fee if you pay it off early.
Using a personal loan to travel with friends or on exotic vacations can be a great option. Just make sure you budget for what you can afford.
It can be a better option than a credit card because you will have a fixed interest rate and payment. It also gives you a defined end date on when the personal loan will be completely paid off.
If you use it responsibly it can not only improve your credit score, but can make it easier the next time you want to borrow money or need another personal loan to travel or take a vacation.