Is Vacation Loan the right way to fund your vacation?

Vacation Loan

Do you want to get a vacation loan? Should you borrow money for a holiday to pay for your ideal vacation? In this article we will ponder on these thoughts.

What Are Vacation Loans/Holiday Loans?

With a vacation loan you can pay for travel expenses like lodging, meals, and other vacation-related expenses. A vacation loan is a kind of unsecured personal loan. Most people repay personal loans taken out for vacations in a series of monthly or annual installments. Banks, online lenders, credit unions, and others may provide personal loan for vacation.

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Should You Take A Vacation Loan?

Justifying a loan for your ideal vacation is simple, whether it’s due to social media pressure or the notion that you deserve a break. But taking a personal loan for vacation may end up causing more problems as its best to avoid going into debt for a trip. Here are a few drawbacks of a vacation loan.

  • A vacation loan has long repayment periods spanning over several years.
  • You pay additional charges and hefty APRs. In the long term, you can pay significantly more for a trip due to interest on the loan.
  • Your capacity to obtain additional loans and meet your financial objectives may be hampered if you have debt.
  • It could be difficult for you to get a vacation loan approved if you have poor credit score.
  • It will increase your DTI (Debt-to-income ratio) DTI, is the percentage of your total monthly income that goes toward paying your debts.

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Alternative to a Vacation Loan/Holiday Loan

It is usually never a good idea to take out a personal loan for vacation. While using a loan to pay for a vacation may be appealing, there are other ways to finance your trip.

Prepare Your Savings

Start setting aside money for your trip in advance. Keep track of your monthly spending and think about setting a monthly target for your trip. Despite the fact that saving money can take some time, it’s one of the simplest and safest ways to pay for your vacation. There are no loan applications, repayment obligations, or debt accumulation issues to be concerned about. Saving money can help you finance your trip without taking on extra debt. Look at your income and expenses, and find ways to redirect certain expenses toward your savings. If you can’t do this, consider some money saving habits to earn a little extra cash to set aside just for travel.

Besides, the best way to save money is with the help of a committee system. I’m sure everyone is aware of committee. Committee is basically a saving circle providing rotating credit and saving opportunities for informal community lending. Members of the committee agree to contribute a predetermined amount to the “pot” at specific intervals, for a set duration. Each member collects the entire pot once, until everyone gets their turn. If your turn is early in the rotation, you collect the full pot of money and then continue paying your share for the remainder of the committee. The order is usually decided by a lucky draw but since family members, coworkers, or neighbours often establish committees together, there’s an element of flexibility. Most commonly Committees are used to save up for household appliances, furniture or even to accommodate travel needs.

The same concept has been digitalized by Money Club. Money Club is an AI based online committee platform which allows you to save money and borrow money when you need it. When you save a small amount every month with Money Club, you can bid for a lumpsum amount when the need arises. In this way you are free from the stress of high interest loans.

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Benefits Of the Money Club Platform

  • It is the best platform for middle-class families who cannot obtain loans in an emergency and must rely on high-interest money lenders.
  • You join a group of verified friends and pool money with them.
  • You can borrow a sum several times greater than the amount you have invested.
  • When you need money, you just have to bid, and the money is in your bank account in six to eight hours.
  • The one who takes the pool of money repays in installments over a period of time with a very low interest.
  • Members who do not take loan earn interest on their savings which is usually 15%-20% yearly.
  • All transactions are safe as money does not lie with the organizer. Members deposit funds into your bank account directly.
  • There are other ways you can earn: If you refer the Money Club app you earn Rs 200 per referral. If you become a Money Club agent and refer 20 members you can earn Rs 18000.

Download the Money Club App and fund your travel without the burden of a vacation loan.


Always make a plan well in advance and save money for your trip if you really want to enjoy it. There is no point in going for a vacation if it leads to financial stress later on.

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