6 Things To Consider If You Are Thinking of Getting A Loan To Travel

If you are thinking of getting a loan to travel there are of course several things you need to consider before committing to it. Many people may consider this to be frivolous, but providing you have done your research before signing on the dotted line and can afford to make the repayments how is a travel loan different to a loan for a car, new clothes etc. We are not here to say you should or you shouldn’t opt for a loan, only you know your financial history and commitments, however ask yourself a few questions before taking it out.

Do You Really Need To Take The Trip?

First things first, do you really need to take the trip? Or should that be is the trip worth getting a loan for? Perhaps it is a bucket list destination, you have to travel due to family commitments or it’s a now or never situation. It’s important to remember that you will be paying your loan back for months, probably years after your trip, therefore you need to ensure it was necessary/worth it. If it is not essential to travel at that time, could the trip wait until you have saved enough?

What Are Your Loan Options?

Regardless of your reasons for getting a loan, there are usually lots of options. The two main ones are new loans and debt consolidation loans. New loans are pretty self-explanatory. It could be your first ever loan or it could be an additional loan to one(s) you already have. Debt consolidation loans allow you to consolidate all existing loans often allowing you to borrow extra too. This means you will only make one payment per month to one lender. Learn more here.

How Much Can You Afford to Borrow (and Pay Back)

You’ll need to consider your current financial situation before contemplating getting a loan. If you are already struggling, it’s unlikely you will be approved for a loan. If you would like a professional to do this on your behalf, seek advice from a financial advisor or the bank/company you are looking at getting a loan from. They will look at your income and outgoings (and projected outgoings over the term of the potential loan) to assess how much you could (comfortably) borrow.

Are You Able To Get A Loan?

The next thing you need to explore is whether you can get a loan. Perhaps you have a history of bad credit (or possibly no credit at all), perhaps you have several loans and credit accounts in place already? We all have a financial history that our credit score reflects. The higher your credit score, the more lenders will consider you a good candidate for a loan. High credit scores can also often bag you lower rates which in turn means lower repayment charges.

What Are the Exact Terms, APR, Fees etc

So you have decided getting a loan to travel is the right route for you, you have considered the type of loan you need, you have assessed your financial situation and you have been approved. However, before signing up for your new or debt consolidation loan, make sure you fully understand the terms associated with it. Know the annual percentage rate (APR) and the total cost you will pay for the loan as well as all of the fees you will or could incur throughout the loan period.

Where To Get A Loan

Deciding where to get your loan from is a big decision. Many people opt to apply for a loan through their usual lender or the bank/building society or company which holds their debit account if a credit account has never been applied for before. Yes, they know your spending habits and financial history however they may not offer the best rates. Therefore, it is always best to shop around, either yourself or via a price comparison site to ensure you get the best deal possible.

Again, the decision regarding getting a loan to travel is completely yours, however, we hope that this post has helped you think about the process and how to get get a great deal to ensure you can travel further and longer!

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