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Guide on Vacation Loans – Bad Credit Options to Finance Your Trip in 2024

vacation loans for bad credit

Whether it’s an unexpected trip or a pre-planned vacation, you may need additional funding to make it happen. For such a situation, a travel loan can be a great solution. Although it may be a risky option to finance your trip, many people find it the only possible one at some point. But is it possible to get a holiday loan with no credit check? Are there any options available to people with credit issues?

The answer is yes. However, these options come with several drawbacks. Let’s delve deeper into the topic and explore vacation loans for bad credit to help you understand whether they will work for you.

Table of Contents

  1. What Are Vacation Loans?
  2. How Much Does a Personal Loan Cost?
  3. What Credit Score Do I Need to Get a Vacation Loan?
  4. Can I Get a Vacation Loan with Bad Credit
  5. Does a Vacation Loan Affect My Credit?
  6. How to Get Vacation Loans for Bad Credit?
  7. Pros and Cons of Vacation Loans
  8. Alternatives to Vacation Loans
  9. Is It a Good Idea to Finance a Vacation with Bad Credit?
  10. Money-Saving Tips: Make Your Next Trip Budget-Friendly
  11. The Bottom Line

What Are Vacation Loans?

Vacation loans are just unsecured personal loans. They are credited in full into a borrower’s bank account and then repaid in affordable monthly payments within up to 60 months. Such a personal loan can be used to cover any individual needs you may face during your vacation. Use the funds to pay for flight, accommodation, entertainment, food, car rentals, tourist taxes, and any other travel-related costs.

Each of your fixed monthly payments will consist of both your initial debt and interest applied by a lender. The lower your interest rate, the less you will have to overpay in total. Therefore, it’s important to choose a personal loan with the lowest possible rate. The point is that some vacation loans can be quite expensive, negatively affecting your monthly budget long after you come back home. Plus, if you have bad credit, your loan cost may differ significantly from what lenders usually advertise.

How Much Does a Personal Loan Cost?

An average personal loan interest rate is now nearly 11%. However, this number can change both up and down depending on several factors. They include a borrower’s credit score and financial stability, the amount requested, the repayment period, and a particular lender.

Besides paying interest, you may face extra fees for processing your loan request, transferring money to your account, paying early, or paying late. All these costs can potentially affect your total loan cost.

Additionally, if you apply for a bad credit option, get ready to be offered less favorable loan terms. A bad credit personal loan interest rate may even reach 36%. When it comes to traditional lenders, you still need to meet their minimum credit score requirements.

What Credit Score Do I Need to Get a Vacation Loan?

When you apply through conventional lenders, the minimum credit score you need to have to get a vacation loan is 560 to 660, depending on the certain lender. Some banks and credit unions give preferences to borrowers with credit scores of 670 or 690 and over. However, a bank or credit union is not your only option when it comes to vacation loans. There are alternative lenders that operate online and are willing to work with underbanked applicants.

Can I Get a Vacation Loan with Bad Credit

Sure, you can. While traditional lenders always set a certain credit score minimum, there are lenders with no strong focus on a borrower’s credit history. Such loan providers don’t check your credit report through major credit bureaus, allowing you to access the funds the next business day with any credit background. The main criterion they consider when determining your eligibility is your monthly income.

If you were turned down by a bank or credit union, shop around for online lenders in your area. Many of them offer bad credit installment loans that work similarly to regular personal loans. They commonly allow you to get up to $5,000 and repay the money in fixed monthly installments within 2 to 24 months. However, keep in mind that bad credit loans from alternative direct lenders are usually more expensive than traditional options.

Does a Vacation Loan Affect My Credit?

When it comes to traditional personal loans, they always have an impact on your credit score. This happens because conventional financial institutions always run hard inquiries, reviewing your credit profile through major credit bureaus. If you get a loan, your credit score will improve after you start making monthly payments without delays. However, if you were denied a loan, this drop may be harder to fix.

Bad credit vacation loans usually don’t affect your credit, as online lenders don’t perform hard credit checks. Even when you make on-time payments, such loans don’t boost your credit. The only way they can affect it is when you pay late.

How to Get Vacation Loans for Bad Credit?

The process of getting a loan should start with checking your credit history. You can request a free annual credit report from each of the credit bureaus to find out how lenders see your credit profile. By doing this, you will figure out what lenders and loan options you can turn to. If your credit score is between 560 and 660, there may be some traditional options available for you. If you have a lower credit score, it’s better to focus on reasonable alternatives, for example, 500 credit score loans.

After you review your credit report, it’s time to move on to picking the lender to work with. When it comes to bad credit options, you need to be cautious. Check out the lender’s reputation, read some reviews written by former customers, and surf the website to ensure it offers fair and safe services.

Compare several lenders in terms of their interest rates, fees, repayment period, and offered amounts. You can also pre-qualify for vacation loans from multiple lenders. This will give you a better understanding of what loan terms you can actually get based on your specific financial situation.

Finally, you need to prepare all the required documents and information to make the process smooth and fast. The basic set includes your ID, Social Security number, income confirmation, checking account details, and sometimes your employer’s contacts. You also need to provide your full name, address, cell phone number, and email.

Many lenders now allow you to apply online. This way, all the documents will be provided electronically. You will submit an online application form and get a response from a lender shortly after. If approved, the funds will be deposited into your active bank account within a business day.

Apply for a vacation financing even with bad credit

Pros and Cons of Vacation Loans

Getting a vacation loan is always a personal choice. To make an informed and weighted decision, you need to thoroughly consider both pros and cons of vacation loans. Below are the most common characteristics to consider.


The ability to get a lump sum deposit to cover your travel expenses; Flexible repayment terms; Predictable monthly payment amounts; Some options provide fast access to cash within one business day; Low rates and minimal fees can be offered to applicants with good credit; Some vacation loans can be obtained with bad credit.


Traditional personal loans hurt your credit score due to a hard credit check performed; Extra costs in the form of origination fees and prepayment fees may be applied; Increased financial stress due to obtaining more debt; You will have to repay your loan years after your vacation comes to an end.

Alternatives to Vacation Loans

Besides travel loans, there are other vacation financing options that may work better for you. Consider some of those mentioned below before taking out a vacation loan.


Savings is a debt-free way to finance your vacation. However, it requires certain financial discipline. To make it possible, you need to save money for your dream vacation in advance by setting aside a certain amount each month. Creating a nest egg will help you cover your travel expenses without adding financial stress to your post-vacation life.

Credit Cards

Credit cards provide holders with access to a line of credit that can be used when needed. Your credit limit will depend on your income and credit score but can be up to $10,000. Using a credit line allows you to pay interest only on the amount that you actually use. Additionally, many credit card issuers offer 0% APR products. Such credit cards make it possible not to overpay if you manage to cover the amount within the set promotional period. Commonly, a promotional period length ranges between 6 and 21 months.

Travel Cards

A travel card is an option available for people with good and excellent credit. It allows them to access various sign-up bonuses and other perks that can help them reduce their vacation costs. This can be a great way to save money in the long run for globe-trotters.

Secured Loans

If you have less-than-ideal credit but want to get a loan at reasonable terms, secured loans can help you with this. By providing a repayment guarantee in the form of valuable property you own, you increase your creditworthiness and reliability for lenders. This way, they can offer you better loan conditions and lower interest rates. However, these options are riskier. This is because you can lose your property if you miss a payment or default on your loan.

Is It a Good Idea to Finance a Vacation with Bad Credit?

Vacation loans can be a great financing option for some and a road to debt for others. Everything depends on your current financial situation. Financial experts advise you to stay away from vacation loans if you don’t have a clear vision of how you’re going to repay the funds. They also recommend paying more attention to building savings in advance. It’s never a good idea to go into debt just to maintain a lavish lifestyle.

At the same time, going on vacation may be a necessity. Psychologists say that it’s one of the best ways to prevent burnout. But even if you need to take care of your mental health, it may be hard to cover vacation expenses on your own. This way, a vacation loan can be a solution. Just approach it wisely and assess your current financial state sensibly. Make sure to choose an economical destination and not to borrow more than you can repay.

You can also use several financing options to make your vacation expenses easier to manage. For example, you can pay for your airline tickets with your savings and use a vacation loan or a credit card to cover the cost of your stay and meals. This will help you make your trip more affordable and reduce the amount you owe.

Money-Saving Tips: Make Your Next Trip Budget-Friendly

If you don’t want to go into debt to finance your vacation, consider ways to make it better fit your budget. Here are a few cost-saving tips to consider:

Create a vacation budget and stick to it. Creating a budget always starts with choosing a destination and learning about how much money you need there per day. Take into account not only meals, excursions, and entertainment but also flight tickets and accommodation. Start to save as early as possible. Divide the sum you need to finance your vacation by the number of months you have left. The amount you get is the one you need to set aside each month. The earlier you start, the easier it will be for your budget. Choose an economical place to visit. Leave countries with high prices for accommodation, services, and entertainment until better times. Choose more budget places to reduce the amount you need for the day of your stay. Travel during the off-season. This will help you save significantly on each of the travel expense categories. Additionally, you will be able to enjoy the place without crowds of tourists. Buy airline tickets in advance. When you book your tickets in advance, you can shop for better prices, choose a suitable date, or even benefit from the airline’s promos. Also, it’s recommended to purchase tickets that can be exchanged without penalties. Consider alternatives to hotels. While hotels may be expensive, there are various alternatives that can provide you with affordable or even free accommodation. Check out hostels with a good location or consider Couchsurfing to stay for free in a host’s place. Plan your meals. Eating outside each day can hit your vacation budget significantly. Instead, book accommodation with a small kitchen or learn about spots that locals visit.

The Bottom Line

Vacation loans are personal loans that can be used for a variety of individual needs. You can get a loan amount in your checking account in a matter of days and spend money on any travel-related expenses. Even if you have bad credit, there are options you can turn to, provided that you can verify a sufficient income. However, before going into debt, make sure it’s a necessity. Also, assess all pros and cons of a certain loan, compare several options, and choose the one that will work for you.