After planning so much, you are now all set to travel and experience the new corners of the world. No matter how exciting or thrilled you or your family members might be, without proper funding, this would be just a dream yet to be completed. Now, you probably wait for another year. But what if the occasions are something special like anniversary or honeymoon or any other event of your life?
Well, you will probably want to make it happen at any cost. Now, if you don’t have adequate savings in your pocket, then going for the option of a vacation loan might be a better option here. It is another category of personal loans that people opt to finance their trip. Let us discuss this funding source in a better way.
What exactly is a vacation loan?
A vacation or travel loan falls into the category of unsecured personal loans where you don’t have to provide any collateral to avail the loan. You will have to make the repayment in monthly instalment over the fixed period. Now, the interest rate and amount that you can get depend on your financial condition, such as:
- Income
- Employment history
- Credit score
- Debt to income ratio
Main features of vacation loan that you must know
The best thing about availing this loan is that it is collateral-free. So you don’t have to risk any of your valuable assets such as a car, home and others. Also, the payment mode of the vacation loan is on instalment. Thus you will have to pay the debt in monthly instalment.
Another great feature of going with these personal loans in Ireland is bad credit funding possibility. This means that even if your credit score is not up to the mark, you might still be yet to get the approval. However, the lending criteria might differ, and you could charge with a higher interest rate.
Why not use a credit card to fund the trip?
For a moment, you might come across a doubt why not to use a credit card rather than taking a loan. Well, you would manage to get the fund quickly without any inconvenience. But, there is more of the story than it looks from the surface.
Here, is the brief comparison of the vacation loan and credit card that will clear your doubt.
| Vacation loan | Credit card | |
| Principal amount | £5,000 | £5,000 |
| Rate of interest | 6% | 17% |
| Loan term | 36 months | 36 months |
| Monthly payment | £165 | £222 |
| Overall Interest | £955 | £3000 |
So you see, using the credit card might seem more convenient but is not at all an excellent option to take. Opting for a personal loan for travel purpose is more feasible here as it comes with lower interest rate and you don’t have to pay hefty interest in the end.
Different travel expenses you can cover with a vacation loan
With the help of a vacation loan, you will able to cover all the major travel expenses that you might face during the trip, such as:
- Plane fares
- Booking hotels
- Transportation expenses (cabs, buses or trains)
- Cost of meals
- Sightseeing expenses
The fund that you will get from the loan will probably be enough to pay anything that you need to make your travel experience memorable. However, make sure that you have contacted the right lender in the market can probably offer you attractive deals.
Tips to make the most of your vacation loan
Getting the fund from an external source
will undoubtedly provide significant relief, but you need to use it properly to
make the most of this loan. Here are some useful tips that can help you use the
loan effectively:
- Have a budget: even if you have managed to get approval for the loan, you must create a budget to ensure that you don’t end up borrowing more amount than exactly required. A budget will guide you thoroughly while you are on the trip.
- Check the market: Before taking the offer of the first lender you met, check the market thoroughly and compare the loans to find out where you can get the best deals.
- Go online: When you are in such a rush of acquiring funds, the best option is to approach an online lender. All you do is submit the online form along with your necessary details and wait for the approval. Once approved, you could get the amount within the same day or even in a few hours.
So, this was everything that you need to know about vacation loan and what you need to do to reap the maximum benefit of this financial product. The more you will research; the better will be the chances of getting attractive deals.