8 Vacation Loans: Finance Your Travel in 2023
Vacation loans are one way to cover travel expenses. Compare loans plus other financing options.
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Vacation loans are unsecured personal loans you use to pay for travel, whether you’re taking a cross-country road trip or flying to your dream destination.
A personal loan can be an expensive way to finance a vacation, so consider all your options before borrowing, including travel rewards cards, 0% interest credit cards and — the cheapest option — your savings.
Here are lenders that offer vacation loans. Learn about your other options and the pros and cons of getting a personal loan for a vacation.
Vacation Loans: Finance Your Travel in 2023
Our pick for
Vacation loans with low rates
Our pick for
Vacation loans with no fees
Our pick for
Small vacation loans
» MORE: Compare unsecured loans
What is a vacation loan?
A vacation loan is an unsecured personal loan you can use to pay for travel expenses, including flights, hotels, rental cars, meals or anything else trip-related.
These loans don’t require collateral, and you repay them in fixed monthly installments, meaning your monthly payment won’t change over the course of the loan. Online lenders, banks and credit unions all offer vacation loans.
Most financial experts advise against incurring debt for discretionary vacation spending. For urgent travel, and when a loan is your cheapest option, borrowing may make sense. But make sure the monthly payments fit into your budget, and commit to paying off the loan on time.
Pros and cons of vacation loans
Weigh the pros and cons of a vacation loan to see if it’s the right choice for financing your trip.
Pros of vacation loans
Low rates for some: For well-qualified borrowers — those with strong income and credit scores above 690 — personal loans can have lower annual percentage rates than credit cards.
Receive the money in a lump sum: You receive funds from a personal loan all at once, rather than over time as you spend money. Having a fixed amount can help you plan and stick to your vacation budget.
Predictable monthly payments: Personal loans have fixed monthly payments over a set term, which means you can plan for repayments in your budget. Knowing when you’ll pay off the debt also helps you stay focused on your payments.
Cons of vacation loans
Potentially risky debt: If you struggle to repay other debts, a vacation loan could add financial stress. Even one missed payment could cause a hit to your credit score, plus you’ll incur late fees while still accruing interest, making your trip more expensive than you intended.
Years of payments: Terms on personal loans range from two to seven years — long after you’ve returned home. Carefully consider how long it makes sense to be paying for your travel.
Vacation loan rates
Annual percentage rates on personal loans range from about 6% to 36%, and some lenders may use the reason you get a loan to decide your rate and loan amount.
The rate you ultimately get depends primarily on your credit score and the percent of your income that goes to other debts each month, also called your debt-to-income ratio. The higher your credit score and the lower your DTI, the more likely you are to get a low rate on a vacation loan. A lower rate means a less expensive loan.
For example, a two-year loan of $3,000 with an APR of 11% would cost about $140 in monthly payments and $3,356 overall. That same loan with a 25% APR would require monthly payments of $160 and cost $3,843.
Use our personal loan calculator to estimate your monthly payments based on your credit score.
How to get a vacation loan
If you’re interested in a vacation loan, you can get one in four simple steps:
Check your credit report to see whether you’re putting your best foot forward. Address any delinquent accounts or errors before you apply.
Compare lenders so you can see what each offers and decide which loan features are important to you (for example, fast funding, a mobile app to manage your loan or the ability to change your payment due date).
Pre-qualify with multiple lenders to see which can offer you the lowest rates and repayment terms that fit your budget. Pre-qualifying doesn’t affect your credit score.
Gather your documents — including proof of identity, W-2s or pay stubs, your Social Security number and bank account numbers — and submit your application.
» GET STARTED: Pre-qualify for free on NerdWallet to compare loan offers
Alternatives to vacation loans
Before you take a loan, consider these alternatives to finance your trip.
Savings: If you have time, start saving. Create a dedicated travel savings account and put away some money each month. Find out how much your trip will cost by comparing prices of flights, hotel rooms and car rentals on travel websites.
» MORE: How to travel on a budget
Travel credit cards: If you travel frequently and have good or excellent credit (690 or higher credit score), you may qualify for a travel credit card that offers a sign-up bonus and other perks that could help lower the cost of your trips in the long run.
0% credit card: If you have good credit, you may also qualify for a low-interest or 0% intro APR card that allows you to carry a balance interest-free, typically for 15 to 21 months. That means if you can pay off your trip in that time, you can skip the interest altogether.
“Buy now, pay later” loans: Some lenders, like Uplift and Affirm, partner with major airlines, hotel companies and travel websites to include BNPL financing for travelers when they book their tickets. This means you can make your purchase now, but pay for it in installments, similar to a personal loan. Borrowers with fair or bad credit (below 690 credit score) may have an easier time qualifying.
Last updated on May 18, 2023
NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial institutions. We collect over 45 data points from each lender, interview company representatives and compare the lender with others that seek the same customer or offer a similar personal loan product. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.
This methodology applies only to lenders that cap interest rates at 36%, the maximum rate most financial experts and consumer advocates agree is the acceptable limit for a loan to be affordable. NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.
NerdWallet's Vacation Loans: Finance Your Travel in 2023
- LightStream: Best for Vacation loans with low rates
- Discover® Personal Loans: Best for Vacation loans with low rates
- Prosper: Best for Vacation loans with low rates
- Upstart: Best for Vacation loans with low rates
- SoFi: Best for Vacation loans with no fees
- LendingClub: Best for Small vacation loans
- Upgrade: Best for Small vacation loans
- Universal Credit: Best for Small vacation loans
Frequently asked questions
- What is a vacation loan?
A vacation loan is an unsecured personal loan you use to pay for travel expenses, like flights, hotels or meals out.
- Can you finance a vacation?
You can finance a vacation with a personal loan or credit card, but it typically costs interest. The cheapest option is paying for a vacation with savings.