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Perhaps you’ve always dreamed of snorkeling at the Great Barrier Reef. Or seeing the Northern Lights in Alaska. Or maybe you simply want to lounge on the beach in the Maldives. Whatever your idea of a perfect vacation, the cost can be enough to make you think twice about traveling. According to a survey from Global Data, international travelers from the U.S. spent an average of $3,580 per person in 2021; for a family of four, that means a family trip could cost over $14,000.
Taking out debt isn’t something that financial experts recommend unless it’s actually necessary. But if you have the opportunity for the trip of a lifetime and don’t want to let that chance slip by, a vacation loan could be an option (just be sure to have a repayment plan in place). These are the best vacation loans based on their rates, fees, and repayment terms.
Best Vacation Loans of 2023
| Company | APR | Credit Score est. | Loan Amount | More Details | |
|---|---|---|---|---|---|
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Using loans or credit cards to pay for a vacation can be a risky financial decision. If you can, delaying your trip until you can save enough money can be a better choice, and you won’t have to worry about interest charges.
Best for No Fees : SoFi
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- APR Range: 8.99% - 25.81%
- Loan Amount: $5,000 - $100,000
- Loan Terms: 24 months - 84 months
Same-day funding available
No origination or late fees
Joint applicants permitted
High credit score requirements
Higher-than-usual loan minimum
Larger loan amounts require additional underwriting
If you’re borrowing money to pay for a vacation, the last thing you want to worry about is hidden fees that add to your overall cost. That’s why SoFi is our pick for the best lender for no-fee loans. SoFi doesn’t charge origination fees, nor does it charge late fees or prepayment penalties.
SoFi allows you to borrow up to $100,000, and you can have up to seven years to repay your loan. Depending on the loan amount, you may qualify for same-day loan funding too. But larger loan amounts may require additional underwriting, so it may take a couple of days to receive the loan funds.
SoFi is also best for those who have very good to excellent credit. Although SoFi doesn’t list a minimum credit score, its annual report showed that the weighted average FICO score of approved borrowers was 747 in 2022.
To finance a vacation with a personal loan from SoFi, you must meet the following requirements:
- Be the age of majority in your state (at least 18 in most states)
- Be a U.S. citizen, permanent resident, or non-permanent resident alien
- Be employed or have an offer of employment
If you do not meet SoFi’s requirements, you may be eligible for a loan—or qualify for a lower interest rate—if you add a co-borrower to your application.
Best for Low Interest Rates : Upstart
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- APR Range: 6.70% - 35.99%
- Loan Amount: $1,000 - $50,000
- Loan Terms: 36 months - 60 months
Lower-than-average rates available
Low credit score requirement
Quick loan disbursement
Charges origination and late fees
Not available in all states
Not everyone qualifies for best rates
Using loans for travel isn’t ideal, but if you decide to borrow money to pay for an upcoming vacation, look for lenders that offer low interest rates. Upstart’s lowest possible rate is lower than the industry average, which could allow you to save a fair bit of money.
To illustrate that point, say you borrowed $14,000 at 6.7% with a three-year term. Your monthly payment would be $430.36, and your total repayment cost would be $15,493.02.
If you borrowed $14,000 at 11.21%—the industry average as of November 2022, according to the Fed—with a three-year term, your monthly payment would be $459.74, and your total repayment cost would be $16,550.48. The higher rate would cost you over $1,000.
| 6.70% APR | 11.21% APR | |
|---|---|---|
| Loan Term | 36 Months | 36 Months |
| Minimum Monthly Payment | $430.36 | $459.74 |
| Total Interest | $1,493.02 | $2,550.48 |
| Total Repayment Cost | $15,493.02 | $16,550.48 |
Not everyone will qualify for Upstart’s best rates. Like many lenders, Upstart looks at factors beyond your credit score, such as your debt-to-income ratio, to determine your rates, but you may qualify for lower rates with Upstart than you would with another lender.
To qualify for an Upstart personal loan, you must meet the following requirements:
- Have a credit score of 300 or higher
- Be the age of majority in your state (18 in most states)
- Have a debt-to-income ratio no higher than 45% if you live in Connecticut or Maryland
- Have fewer than six inquiries over the past 12 months
- Have a verifiable source of income and earn at least $12,000 per year
Upstart loans are not available to residents of Iowa or West Virginia.
Best Credit Union : PenFed Credit Union
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- APR Range: 7.74% - 17.99%
- Loan Amount: $600 - $50,000
- Loan Terms: 12 months - 60 months
No origination fees
Easy to join the credit union
Allows co-applicants
Shorter repayment terms
Longer wait to receive funds in some cases
Late fees apply
If you need money for a vacation, a loan from a credit union could be an appealing option. As non-profit organizations, credit unions like PenFed have lower fees and interest rates than many banks.
PenFed Credit Union offers personal loans with competitive rates, and it doesn’t charge origination fees. There are no prepayment penalties, so you can pay off your loan ahead of schedule without added fees.
PenFed has a lower loan limit than most lenders, and its membership is open to the general public; you aren’t required to have an affiliation with the military or a specific employer. You can join by opening a savings account and depositing as little as $5 during the loan application process.
To get a trip loan from PenFed Credit Union, you must meet the following requirements:
- Be the age of majority in your state (18 in most states)
- Have a reliable source of income, verifiable with pay stubs or bank statements
- Provide proof of your identity, such as a driver’s license or passport
If you don’t meet PenFed’s credit or income requirements, you have the option of adding a co-borrower to your loan application.
Best for Small Loans : First Tech Federal Credit Union
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- APR Range: 8.99% - 18.00%
- Loan Amount: $500 - $50,000
- Loan Terms: 24 months - 84 months
Low loan minimum
Longer-than-usual loan terms
No origination fees
Loans only available to members
Loan minimums high for longer loan terms
No autopay discounts
If you need a small loan for vacation expenses, First Tech Federal Credit Union has one of the lowest loan minimums of all the lenders we evaluated. You can borrow as little as $500 or as much as $50,000.
First Tech Federal Credit Union has longer loan repayment terms than most lenders, giving you up to seven years to repay if you borrow $20,000 or more. The lender doesn’t charge origination fees, and there are no prepayment penalties.
You must be a member of the credit union to qualify for a loan. Although its membership criteria aren’t as strict as some credit unions, you may have to pay small added fees to qualify.
A longer loan term can be attractive because it gives you a smaller monthly payment. But that longer term will cause you to pay more in interest over time. Use our personal loan calculator to see how the loan term affects your total repayment cost.
Vacation loans from First Tech Federal Credit Union are limited to members. You can join during the loan application process, but only if you meet the following criteria:
- You have a family member or household member who is already part of the credit union.
- You work for one of the credit union’s partner employers.
- You live or work in Lane County, Oregon.
- You belong to the Computer History Museum or the Financial Fitness Association (you can join either organization online for as little as $8 to $15 per year).
You must be the age of majority in your state to be eligible for a loan, and the credit union’s minimum recommended credit score is 660.
Best for Quick Funding : Rocket Loans
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- APR Range: 9.12% - 29.99%
- Loan Amount: $2,000 - $45,000
- Loan Terms: 36 months - 60 months
Same-day loan disbursements
Autopay discount
Quick pre-qualification process
Charges origination fees
Only two repayment term options
Not available in all states
Whether you score a great deal on a last-minute cruise or manage to find a cheap flight overseas, sometimes you need money fast. That’s where Rocket Loans comes in. If you’re approved for a loan, you can receive the money as soon as the same day you apply if you meet some clearly laid-out criteria.
To qualify for same-day funding, you must complete the loan process and sign the loan promissory note by 1 p.m. ET on a business day. Rocket Loans disburses the money through ACH, but depending on your bank’s processing times, it may take longer for the funds to appear in your account.
Rocket Loans does charge origination fees, and the fee can be as high as 9% of the loan amount. And it only has two repayment term options—36 or 60 months.
You must meet the following requirements:
- Be the age of majority in your state (18 in most states)
- Have a verifiable source of income
- Be a U.S. citizen
- Live in an eligible state
Rocket Loans does not issue loans to residents of Iowa, Nevada, or West Virginia.
Compare the Best Vacation Loans of 2023
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Final Verdict
If you decide to take out a loan to pay for your upcoming trip, there are several lenders that offer unsecured personal loans with competitive interest rates. Some companies, such as SoFi, allow you to borrow up to $100,000 with no origination fees. And lenders like First Tech Federal Credit Union give you as long as seven years to repay the loan, allowing for more affordable monthly payments.
Upstart had the lowest minimum rates out of the lenders we looked at, and approved borrowers can receive their money as soon as the next business day.
While vacation loans can be a convenient financing choice, explore your options before turning to a loan. And if you do decide to borrow money, request quotes from multiple lenders to get the best rates and avoid unnecessary fees.
Wondering about other options? See our picks for the best overall personal loans for a wider range of options.
How to Choose the Best Vacation Loans
Best Place to Get a Vacation Loan
Vacation loans can come from traditional banks, credit unions, and online lenders. If you have an existing relationship with a bank or credit union, you may qualify for a loan with competitive rates and relationship discounts. But online lenders tend to offer quick and easy loan applications, and they make it easy to shop around and compare rates.
How to Qualify and Apply for a Vacation Loan
Vacation loans are usually unsecured, and lenders look at your credit history, income, and other debt when reviewing your application.
You can typically apply for a loan online, though some lenders will require you to visit a local branch in person to close the loan. In some cases, lenders may ask you to submit additional documentation, such as your pay stubs or bank statements, to verify your income.
Lenders review applications quickly. Depending on the lender, you can receive a decision within minutes, or it can take a few hours. Once approved, you must sign the loan agreement and choose a disbursement method. Some lenders offer loan disbursements as soon as the same day you apply, but it may take several days for your funds to appear in your bank account.
How to Compare Vacation Loans
Shopping around is a smart idea before choosing a lender. When researching your options, compare the following factors:
- Annual percentage rate (APR): The APR is a percentage that represents how much you pay in interest and fees in a year. The higher the APR, the more expensive the loan will be over time.
- Added fees: While some lenders forgo origination fees, that’s not always the case. Origination fees can be as high as 10% of the loan amount, and many lenders charge late fees too.
- Loan amounts: Vacation loans range widely, from a couple of hundred dollars or less to $100,000, but some lenders have stricter loan minimums and maximums.
- Repayment terms: Terms generally range from 12 to 84 months, although you may find shorter or longer terms. Generally, the shorter the repayment term, the lower the interest rate, so it’s wise to choose the shortest repayment term you can afford.
- Credit requirements: Credit requirements vary by lender, but you’ll typically need fair credit to qualify for most vacation loans. All other things being equal, the better your credit, the better your rates will be.
- Joint applications: If you don’t meet a lender’s credit or income requirements, you may be able to add a joint borrower to your application. Adding a co-borrower improves your odds of qualifying for a loan and getting a lower rate than you’d get on your own.
Vacation Loan Alternatives
Before taking out a vacation loan, consider these other options:
- Build your savings: While delaying a trip may not be appealing, putting it off until you can save enough money can be a smart decision. You won’t have to pay any interest charges, and you’ll have more peace of mind without debt on your shoulders. Stashing a little money into a high-yield savings account can help you save enough money for your vacation in less time than you may think.
- Use travel rewards points: If you have a travel rewards credit card, you may have accrued miles or points that you can redeem to pay for some or all of your trip. And some credit cards have special incentives for new cardmembers that can make the cost more affordable.
- Take advantage of a 0% APR offer: Some credit cards advertise promotional offers that give you 0% APR for a specific period—such as 6 or 12 months—on new purchases. After the promotional period expires, the regular APR applies. But if you use your card to pay for your vacation and pay it off in full before the promotional APR ends, you won’t pay any interest charges.
What Is a Vacation Loan?
A vacation loan is an unsecured personal loan that you can use to pay for travel expenses, such as your flight or hotel stay. Loan amounts can range quite a bit, so you can use a vacation loan to cover anything from a domestic road trip to a dream vacation abroad.
Should You Borrow Money for a Vacation?
Borrowing money to travel isn’t recommended. Financing a vacation with a loan means you’re paying interest, and you could end up making payments for several years after the trip is over. Those payments can make it difficult to pursue other goals, like saving for retirement or building your savings.
Before borrowing money for a vacation, explore other options, such as delaying the trip until you can save enough money to pay for it in cash. But if you must take out a loan, borrow the minimum you need and shop around to find the best rates.
Who Should Consider a Vacation Loan?
In most cases, borrowing money to pay for a vacation isn’t wise. But if you have excellent credit and minimal debt, you may be eligible for a vacation loan with low interest rates and favorable repayment terms. Before taking out a trip loan, make sure you can comfortably afford the monthly payments afterward.
Do Vacation Loans Require a Down Payment?
Vacation loans are generally unsecured personal loans, so there’s no need for a down payment or collateral like with a secured loan. The loans are issued based on your creditworthiness, and lenders look at factors like your credit history and income.
Methodology
Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of personal loan lenders. To rate providers, we collected hundreds of data points across more than 40 lenders, including interest rates, fees, loan amounts, and repayment terms, to ensure that our reviews help users make informed decisions for their borrowing needs.
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