Should You Finance a Vacation?
If you want to plan a vacation for your family, you may be considering whether or not to take out a personal loan to pay for your trip. Either way, you have options. Here are some things to consider before making the decision to take out a personal loan to finance a vacation.
When to Consider a Personal Loan
Most of the time, travel has to be booked far in advance so that you can get the accommodations you want for the dates you have planned. While many hotels will allow you to put down a deposit and pay the remaining balance closer to check-in, that’s not always the case. Other things like flights or rental cars may also need to be paid upfront to guarantee your reservation.
If you’re going to set aside a certain amount of money anyway each month to put toward a vacation, taking out a loan may make sense. Having one lump sum will allow you to book all of your accommodations in advance and ensure you lock in low rates in advance.
Then, you can simply pay the amount on your loan that you would have been saving toward a future vacation. This way, you get to travel sooner rather than later! Remember, try not to take out a personal loan that puts your payment higher than what you would have saved toward your vacation without the loan.
Think About Affordability
Can you really afford to pay for a vacation right now? If the answer to this question is no, or if you hesitate to answer honestly, then you probably shouldn’t take out a loan to travel. Instead, consider where you can cut back or make extra money to make a vacation affordable.
It’s not worth going into debt or putting yourself in a tight financial situation for a week of fun. Taking out a loan is perfectly OK, but only if it truly fits comfortably in your budget. It’s also important to consider your current debt. If you have other loans and credit cards to make payments on, another loan may not be the answer.
However, if you have money in savings or fewer financial commitments each month, you may feel more confident taking out a loan. Many people would rather keep their cash in place and take out a loan so that their cash is available for emergencies if needed.
If you decide that a personal loan is right for financing your family’s vacation, plan your trip wisely. Don’t splurge too much just because you have “extra” money for the trip. Plan a fun trip full of excitement, but don’t book a room that you couldn’t afford (or wouldn’t pay that much for!) otherwise. Don’t book first class tickets on a flight if it’s something you wouldn’t book normally.
Budget your trip and figure out how much you’ll spend on travel, gas, food, activities and even souvenirs. Then try your best to stick to that budget. Your trip will be much more enjoyable if you don’t come home with regret over how much you spent. If you plan modestly, you’ll be able to take another trip even sooner than if you splurged.
If you think that a personal loan might be right for your next vacation, we can help. Personal loans often have lower rates than credit cards, making them a better financing option when you consider how much you’ll spend on interest. Just apply online or give us a call to get started planning your family’s vacation.