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Should you take out a loan for your next trip? Discover the pros and cons of personal installment loans.

Everyone deserves a little adventure or to travel on occasion, but not everyone has the funds readily available. Sometimes, travel may be necessary for reasons other than an adventure — but the funds needed to cover the trip may not be on hand.

Either way, don’t let your current financial situation prevent you from making memories with your loved ones. Discover the pros and cons of personal installment loans and some common examples of why a travel loan may be right for you.

The pros of using a travel loan

Taking out a loan to finance travel can provide some significant benefits. These can include:

  • Added flexibility — Sometimes, getting travel discounts requires fast action. And if a bargain is set to expire before the funds to pay for it are saved up, a travel loan can help secure the funds more quickly — so the borrower can grab the discount before it’s gone.
  • Enabling emergency travel — When travel is a must and the cash to cover it outright isn’t available, a travel loan can help quickly bridge the funding gap and make the trip possible.
  • No collateral Travel loans don’t typically require the borrower to pledge an asset to receive the loaned funds.
  • Fixed payments — Travel loans typically allow the borrower to repay the debt in fixed amounts (usually monthly) over time, making the recurring payments predictable and spreading the trip’s cost out over time.
  • Chance to build credit — By making on-time payments and eliminating the loan debt in full, a travel-loan borrower may be able to build good credit by establishing a good payment history.

The cons of using a travel loan

Financing travel with a personal loan can have some drawbacks — most of which can be avoided by making on-time or early payments. Some leading reasons one might want to avoid taking out a travel loan can include the following:

  • Interest — Because travel loans require the borrower to pay interest on the money received, the total cost of the trip will be higher when paid for with a loan than if it is paid for with savings or other on-hand funds.
  • Fees — Personal loans can often carry added fees from the lender, which could further increase the cost of a trip that’s paid for via a travel loan.
  • Possible added stress — Especially for those who aren’t able to pay off their loan quickly or are not in a good position to take on added debt, the financial realities of having to pay off a travel loan could lead to stress.
  • Potential for negative impact on credit score — Of course, borrowers who fail to make on-time payments on any loan could see their credit score decline. If the lender runs a hard inquiry on the borrower’s credit when evaluating his or her creditworthiness, this could slightly lower his or her credit score, too.

5 scenarios in which a travel loan might make sense

Consider these five scenarios in which a personal loan for travel may be worth looking into:

  • A once-in-a-lifetime opportunity — Whatever the reason for the travel, if you’re likely to regret not taking the trip and don’t have the funds on hand to pay for it, a travel loan might be worth considering — if you’re sure you’ll be able to pay off the debt in a timely manner.
  • A family wedding — No one wants to miss a close family member’s special day — especially if you’re part of the wedding party. So, if you don’t have the cash to cover travel expenses and you’re confident you can pay the loan off relatively quickly, a travel loan may be a good option for you.
  • A promising job interview — If you’ve been invited to interview for a desirable job opportunity and don’t have the cash to cover travel expenses, you may want to consider a travel loan. But before you take out the loan, you should be confident you can pay off the debt soon after, whether or not the job offer is extended.
  • Emergency travel — Some situations offer little choice but to travel, whether you have the funds on hand to pay the expenses right away or not. Examples here might include urgent and faraway medical procedures (for you or a family member), or the funeral of a close relative or friend. If you feel comfortable taking on the debt, a travel loan might be worth considering in these cases.
  • A fast-expiring opportunity — Whether it’s a trip to see an elderly relative for what may be the last time or your final chance to see your soon-to-graduate daughter compete in the sport she’s passionate about, sometimes a trip just can’t wait. And in these cases, if you’re comfortable taking on the debt, a travel loan may be an option worth pursuing.

At Security Finance, we offer a range of personal installment loans to help keep you covered over your next trip. Our loans are typically processed promptly, with quick approvals in many cases and with more flexible options than those typically found at a bank — all without the need for a bank account or a high credit score. Further, our installment loans follow set terms and offer affordable monthly payment plans, with no balloon payments or prepayment penalties.

Visit today to learn more about all of our loan options — and to find the one that’s right for you.