When the trip of a lifetime comes around, sometimes you simply do not have the finances to fund your travels. Even if you have a stable income, you might not be able to come up with the cash you would need for flights, accommodations, and sightseeing.
In these cases, there are options available to secure the money you need to avoid any “fear of missing out” from lost travel opportunities. While discretionary spending on holidays is not always advisable, if you are confident in your ability to quickly repay such a loan then it can be a realistic option. Whether you apply online for a travel loan or seek another method of financing, a little research ahead of time can help you pick the best option for your financial situation.
To get you started, let’s look at some specific options for financing your travels, whether you are planning a week away or an extended adventure abroad.
Start A Travel Savings Account
Naturally, the best way to finance your travels is to have cash on hand for such a purpose. Putting aside a portion of your income each month earmarked specifically for a trip away is a good way to ensure that you have money when spontaneous travel plans arise. Taking this route is also the cheapest method in the long run as you will avoid paying any interest on your holiday expenses.
Of course, not everyone can put aside a chunk of cash each month for such a purpose. Perhaps even if you can, your current travel funds may be a bit low from previous trips. In these cases, you need to look elsewhere for holiday financing.
Consider A Personal Line Of Credit
One of the best options for those who need straightforward financing for their holiday plans is to use a personal line of credit. With a solid credit score and a stable income, these can be easily secured from a variety of financial providers.
The big advantage of using a line of credit is that you only need to use the precise amount of credit that you need and no more. This means that you can save on paying interest on loans that are larger than you need for your current holiday plans.
Use A Personal Loan
Personal loans can also be taken out for travelling. However, in these cases, you may need to secure such a loan with some collateral to get a reasonable rate. Unsecured personal loans may mean larger interest rate payments making your trip more expensive in the long run.
Credit Cards
As a last resort, you can also put your holiday expenses on your credit card. This should not be your first option, however, as the interest charged by most credit cards is substantially higher than the rates you will find from the options listed above.
If you do need to use your credit card for part or all your holiday spending, consider getting a travel-based credit card. Depending on the type of card you get, this can give you points or bonuses for travelling which can save you money on future trips.
Use Your Best Judgement
Any of the options outlined here represents an effective way to finance your upcoming holiday plans. However, use your best judgment when taking out a loan for discretionary spending like travelling. Try to pay for as much of the trip as you can out of your own pocket. The last thing you want to do is pay off your dream holiday for months or even years after the fact.