How to Get a Vacation Loan


Step 3: Submit a loan application

Applying for a personal loan is fairly simple. A personal loan application asks for basic information, including your name, social security number, place of employment, and how much you earn.

Once you submit the application, most lenders run a soft credit check that does not impact your credit score.

Once it checks your credit history to determine your creditworthiness, the lender will approve or deny your application. It’s at that time that they’ll let you know how much your personal APR will be, including the interest rate and all fees.

Step 4: Proceed with your lender of choice

When you’ve picked a lender, let the lender know you’re ready to go ahead with the loan.

At this point, the lender will run a hard credit check. This credit check will ding your credit score, but not by much. And making your regular monthly payment on the holiday loan should lead to a relatively quick rebound in your score.

Step 5: Provide additional documents as needed

As a lender conducts a final credit check to verify your financial information, it may ask for additional documentation. For example, if you’re self-employed, the lender may want two or three years worth of tax returns.

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The faster you get documentation to the lender, the faster it can fund your personal loan. The time to get a personal loan depends partly on the lender and partly on how quickly you submit documentation when it’s requested.

Step 6: Wait for funding

From the time of loan approval, it typically takes a lender one to 14 days to deposit the funds into your bank account.

Alternatives to a vacation loan

A vacation loan is not the only way to fund travel. Here are a few alternative ideas worth consideration.

Savings account

Sometimes, the planning is as much fun as the actual trip (or nearly as much fun). Consider how much you can afford to put away each month, and plan a trip around that amount. For example, if you can manage an extra $300 per month, you’ll have $1,800 for a nice road trip in six months or $3,600 in one year.

Credit card with 0% introductory rate

If you have good credit, consider applying for a credit card with a 0% introductory rate. These credit cards typically give you 12 to 18 months interest free. Let’s say your credit card offers a 0% intro APR for 18 months and you spend $5,000 on vacation. By making 18 equal payments of $278, you’ll have the trip paid in full before the promotional period expires.

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Garage sale

If you’re still social distancing, now is a great time to go through your home — including the garage, basement, and attic — to find anything you no longer need or use. Take a photo and sell those items online through Facebook or your neighborhood website.

Sometimes, waiting to pay cash for a vacation is the best thing to do. And sometimes, financing makes sense. Here are a few examples of when to finance instead of paying cash.

  • When you’re traveling to be with the people you love in a time of need
  • When you’re just starting out in life and intend to use a small vacation loan to build your credit score
  • When you’re offered a once-in-a-lifetime trip

There’s nothing quite like a vacation, and the next one is likely to be extra special. When it comes to paying for that trip, though, run through your options and choose the one that works best for you, even if it means waiting a few extra months.

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