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Vacation loans are unsecured personal loans used to pay for travel, such as taking a cross-country road trip or flying to a dream destination.
A personal loan can be an expensive way to finance a vacation, so consider all options before borrowing, including travel rewards cards, 0% interest credit cards and — the cheapest option — your savings.
Here are lenders that offer personal loans for vacation. Learn about the pros and cons of vacation loans and other options to fund a future trip.
SoFi offers prime borrowers competitive rates, no fees and rate discounts. Its perks include fast funding, a wide range of loan amounts, plus financial advice.
Dreaming of that once-in-a-lifetime trip, but worried your credit score will hold you back from financing it? You have options. While getting approved for a travel loan with bad credit may be challenging, it is possible with the right approach.
In this comprehensive guide we’ll cover everything you need to know about securing a travel loan if you have bad credit including
- Types of bad credit travel loans
- Lenders to consider
- Tips for getting approved
- Alternative financing options
- Strategies for rebuilding credit
- FAQs on travel loans for bad credit
Plus plenty of other key information to help make your next big trip a reality, even with less-than-ideal credit.
What is a Travel Loan?
A travel loan provides financing specifically to pay for vacations and other recreational trips. Borrowers receive a lump sum of cash upfront, which they repay over an agreed term length with interest.
Travel loans work similarly to personal loans but the funds must be used for vacation expenses only like
- Airfare, hotels, tours, cruises
- Travel gear and luggage
- Food, entertainment, activities
- Passports, travel insurance
- Gas, rental cars
Travel loans typically range from $500 up to $10,000 or more. Term lengths span 6 months to multiple years.
Bad Credit Travel Loan Options
While most traditional banks won’t approve borrowers with credit scores below 640 for travel loans, you do have some options for financing even with bad credit. Here are a few top picks:
Online Lenders – Companies like LightStream and Upstart offer personal loans for any purpose, including travel, and may accept credit scores in the 600s.
Credit Unions – Local credit unions are member-focused and may offer travel loans for those with weaker credit.
Peer-to-Peer Lenders – Sites like LendingClub and Prosper connect you directly with individual investors who fund personal and travel loans. Credit requirements can be more flexible.
Guarantor Loans – Adding a cosigner with good credit may help you qualify and get better rates.
Secured Loans – You pledge collateral like your car title to secure financing, usually with less stringent credit checks.
Shop around with multiple travel loan lenders to compare your options and chances for approval.
Improving Your Chances for a Travel Loan
While getting a travel loan with very bad credit below 580 will be quite difficult, there are steps you can take to boost your odds for financing:
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Have steady income – Lenders want to see you can reliably make payments, so a stable job is key.
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Make a large down payment – Paying 20-30% upfront shows commitment and lowers the lender’s risk.
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Use collateral – Putting up an asset as security can help offset a lower credit score.
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Bring a cosigner – Including someone with great credit can get you approved and at better rates.
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Limit your request – Asking for a smaller loan amount improves your approval chances. Stick to under $5,000.
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Explain past issues – If you’ve had credit problems, share how you’re fixing them.
Taking steps to mitigate your credit risk makes lenders more likely to approve your travel loan request.
7 Tips for Getting a Travel Loan with Bad Credit
Beyond the strategies above, following these tips can also increase your odds of securing a travel loan, despite having poor credit:
1. Check your credit reports – Review all three bureaus for errors dragging down your scores. Dispute any inaccuracies found.
2. Pay down revolving balances – Lower credit utilization by paying down cards can give an instant boost to your credit.
3. Become an authorized user – Get added as an authorized user on someone’s old card to build positive payment history.
4. Avoid new credit inquiries – Multiple recent applications make you look desperate and risky. Only apply selectively.
5. Put extra money down – Making a larger down payment signals you’re financially committed to repaying the loan.
6. Add a deposit or collateral – Sweeten the deal by allowing the lender to secure the loan against a deposit or asset.
7. Provide explanation letters – Detail any past credit issues and clearly explain how you’re rectifying them.
Following this advice can go a long way towards convincing lenders to approve travel financing, even with less-than-stellar credit.
Alternative Financing Options for Bad Credit Borrowers
If you try but can’t get approved for a dedicated travel loan, all is not lost. Here are some alternative financing options to fund your next vacation:
Credit card balance transfers – Transfer high-interest balances to a new 0% intro APR card to free up cash.
Home equity loan – Tap available equity in your house through a cash-out refinance or HELOC.
Payment plan with provider – Ask airlines, hotels, etc. if they offer installment plans to break up payments.
Buy now, pay later services – Companies like Uplift and Affirm provide travel financing to split costs over time.
Crowdfunding – Platforms like GoFundMe let you raise donations from friends, family, and the public to pay for trips.
Rewards point redemptions – Cash in accumulated credit card or loyalty program points to cover flights, hotels, and activities.
0% APR deals – Consider balance transfer or 0% APR offers from credit card companies to defer interest costs.
Explore these options if your credit standing is in the way of a traditional travel loan. With creativity and planning, you can make any trip possible.
Rebuilding Credit to Qualify for Better Travel Loans
The very best way to secure travel financing with bad credit is to spend time improving your credit standing. Here are powerful tips for credit repair to qualify for a great travel loan in the future:
- Get current on any past due accounts
- Pay down balances below 30% of limits
- Have late payments removed with goodwill letters
- Become an authorized user on a family member or partner’s credit card
- Limit hard credit inquiries by only applying for needed financing
- Enroll in credit monitoring to review negative factor impacts
- Setup payment reminders to avoid missed payments
- Open a new credit card and use responsibly to build positive history
With consistent effort over 6-12 months, you can significantly boost your credit scores and qualify for a travel loan with excellent rates and terms. The investment of time is well worth the substantial money you’ll save in interest.
FAQs about Travel Loans for Bad Credit
Here are answers to some frequently asked questions about securing financing for a dream vacation when you have bad credit:
Are travel loans just personal loans?
Travel loans work very similarly to personal loans but are designed specifically for trip expenses versus general purposes. Some lenders specialize in travel loans.
Can I get approved with no credit history?
It’s very challenging to qualify for a travel loan with no credit history at all. Try becoming an authorized user first or getting a secured credit card to start building credit.
What credit score is needed?
While each lender has their own standards, you’ll generally need at least a 600 credit score to potentially get approved for a travel loan. Scores of 700+ qualify you for the best rates.
Should I use a peer-to-peer lender?
P2P lenders like LendingClub do often approve borrowers with weaker credit profiles. This makes them a solid option for bad credit travel loan seekers.
How much can I borrow?
Most lenders will approve up to $10,000 for travel loans with bad credit. Exceptional cases may allow up to $15,000-$20,000. Manage expectations and stick to smaller loan amounts.
How long do I have to repay the loan?
Repayment terms are typically 2-7 years for travel loans. Shorter terms often have lower interest rates but mean higher monthly payments. Find the right balance for your budget.
Final Thoughts
A dream trip may seem out of reach if you have bad credit. But as you can see, there are many options for securing financing through travel loans and alternative sources. With prudent planning, borrowing only what you can afford to repay, and diligent work to improve your credit standing over time, that unforgettable vacation can become reality even with poor credit scores today.
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 (APRs) 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 interest rates, which means you’ll have a fixed monthly payment for the full loan term. Working toward a set debt payoff date can also help you stay focused on making payments.
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 and address any delinquent accounts or errors before you apply.
- Estimate the total cost of the vacation in advance so you can request the right loan amount.
- Pre-qualify with multiple lenders to see which offers the lowest rate and repayment terms that fit your budget. Pre-qualifying doesn’t affect your credit score.
- Gather the necessary documents — including proof of identity, W-2s or pay stubs, your Social Security number and bank account numbers — and submit a formal application.