Imagine your perfect dream getaway for a vacation. Be it relaxing on a beach, hiking through mountain ranges, exploring the stunning views of an unknown ancient city, or walking through the marvelous greeneries of a vineyard, whatever suits you the best. Now think about what is keeping you from that vacation. If the answer is money, then taking a vacation loan might be the best solution for you. However, if you don’t have any prior knowledge about vacation loans, choosing a loan policy might be challenging for you. It might become a daunting task if you are not familiar with the lenders who offer vacation loans. You must have primary knowledge about the interest rates, loan passing period, repayment period, and maximum amount to make a well-thought-out decision for yourself.
In today’s article, we will talk about the best companies to get vacation loans. We will also discuss some alternative ways to fund your dream getaway. Let’s dive into it.
Why Take A Vacation Loan?
Let’s face it, taking a loan to fund your vacation is not ideal. But if you keep waiting for the ideal situation, you might never take your vacation. One of the major perks of taking a vacation loan is that you can take your trip right away. A vacation loan request gets approved often as soon as the day you apply. This allows you to finance your trip at once, instead of waiting for months to save up the money you need.
Besides, the term of vacation loans can stretch for as long as seven years. You can choose a longer period to spread out the cost for several years to pay a smaller monthly payment. Which is a reasonable deal.
Not to mention the application process for a vacation loan does not require any collateral and it’s also quick easy, and safe.
Where to Get Vacation Loans?
Many different sources offer vacation loans, such as local and national banks,
Credit unions, online lenders, etc. But you have to take precautions and exercise your due diligence before opting for a loan policy.
However, even if you choose to take a vacation loan, it’s normal to get confused to choose from so many options. There are many lenders on the market and they all have different competitive rates. That is why we have analyzed and picked the best options for you. All of these provide travel loan services
Best Companies for Getting a Vacation Loan
Now, that we have established the need for a vacation loan, let’s talk about some of the best options for you to consider if you are thinking about getting a vacation loan. We have compiled the list based on each company’s APR, loan amount, and loan time.
SoFi
The first thing you need to consider before getting a personal loan is your credit score. The higher your credit score is, the chances of your loan request getting approved becomes higher. For people who are starting and don’t have any credit history, SoFi’s loan policy is the way to go since it does not have any minimum credit score requirement.
Their vacation loan policy offers a lower annual percentage rate (APR), flexible repayment terms, and high maximum loan amounts, among other advantages. You can take a loan as low as $5,000 to as high as $100,000. Depending on your loan amount the interest rate can range from 8.99% – 25.81%.
The loan term can last from 1 to 7 years depending on your loan amount. One of the major perks of taking a loan from SoFi is that they don’t charge origination fees nor do they charge any late fees or prepayment penalties. Which makes it a viable option if you have a good credit history.
Upgrade
For people with low income or bad credit scores who want to take small loans for vacation, the upgrade is a really good option to have. Upgrade offers you a loan amount from $1,000 to $50,000.
It also has a pretty standard interest rate which can be anywhere from 8.49% to 35.99%. It offers a repayment period of 24 months to 84 months. Although Upgrade has a minimum credit score requirement of 560, it normally allows loan requests from below the score of 660 through its partner lenders which offers flexibility. It also accepts joint applications which allows you to collaborate with a co-borrower, which can increase the chance of your loan request significantly.
Since it normally deals with borrowers with a less-than-ideal credit score, the interest rate tends to be higher than usual, but it is a great option to have in cases where your loan requests are being denied for bad credit history.
LightStream
Lightstream is another great option for people with a minimum credit score of 600. If you want your loan request to be approved quickly and effectively, then Lightstream is the way to go. If your loan request gets approved, you could be able to receive the loan funds as soon as the same day you apply.
Lightstream offers you a loan amount from $5,000 to $100,000. It also has a pretty standard interest rate which can be anywhere from 7.49% to 25.49%. The repayment period can extend from as low as 24 months to as long as 144 months. One of the good things about loan policies from Lightstream is that it doesn’t charge origination fees or late fees.
But LightStream requires a very good to outstanding credit history for loans to be approved. It also has a $5,000 loan minimum, so it may not be right for everyone. But, if you meet qualifying standards and are authorized by another lender, its Rate Beat program offers a discount. Still, it’s a quick and easy solution for loan requirements.
Upstart
If you have a bad or less-than-ideal credit history or you want a lower interest on your loan then Upstart is the way to go. It does not have a minimum credit score requirement. And it offers a loan amount from as low as $1,000 to as high as $50,000. It also has a very reasonable interest rate of 6.40% to 35.99% depending on your loan amount. The repayment period of loan terms can stretch from 36 months to 60 months.
Like many lenders, Upstart bases prices on variables other than credit score, such as debt-to-income ratio (DTI), although you may qualify for cheaper rates with Upstart since its interest rates are lower than the industry standard.
Suppose, if you borrowed $14,000 at 5.2% for three years, your total repayment would be $15,150.63, with a $420.85 monthly payment. If you borrowed $14,000 at 12.17%, according to the Fed’s average for industry standards as of August 2023, for three years, your monthly payment would be $466.14 and your total repayment cost would be $16,780.96. Higher rates cost over $1,200.
Considering these rates, Upstart is a really good option.
Prosper
Another option for People with less-than-ideal credit score is Prosper. Their loan amounts range from $2,000 to $50,000. Although they have a minimum credit score of 560, they offer loans at a very low percentage rate which is lower than industry standard.
Their interest rates vary from as low as 6.99% to as high as 35.99% which is ideal for borrowers. Their repayment period lasts from 24 months – 84 months. It is a really good option for people with low credit history.
Alternatives to Vacation Loan
Vacation loans are a must if you don’t have the budget for your trip. But, what if your application for the loan gets rejected? You have to think about some alternative ways to raise the funds. We have compiled a list of alternatives to a vacation loan.
Build savings:
Delaying a trip may not be fun, but saving money and being frugal is wise. No interest means more peace of mind and living with no debt. That is why saving money in a high-return savings account can always help you pay for your dream vacation faster than you expect.
Redeem travel rewards
Always check your credit card benefits. If you have travel rewards on your credit card such as miles or points, you can use those to pay for your vacation. Although, new card member incentives can lower the cost of some credit cards in some cases.
Benefit from 0% Interest offers
Some credit cards offer 0% APR on new purchases for 6 or 12 months. After that period is over regular APR or interests apply. Use these promotional offers to pay for your vacation to avoid any interest.
Also Read: Swift Car Repair Loans for Unexpected Vehicle Expenses
Conclusion
Getting the necessary funding for your vacation can be a difficult task, but it is not impossible. If you consider and verify the loan rates and choose a loan policy that best fits your interest, your dream vacation can be at your fingertips. But, remember to compare the rates, repayment period, and the amount. Choose wisely or else your vacation can cost you a hellish experience in exchange for a happy trip. We wish you a happy vacation. After all, You have earned it!
