I remember the first time I came across the idea of vacation loans, but not in the traditional sense. I was in undergrad in a lecture hall sitting next to a girl I also happen to really like who consistently complained about her student loans. While the professor was lecturing she was busy looking up tickets to Greece. Keep in mind, I went to undergrad in California before the Greek economic crisis which made tickets much more affordable – so these tickets were expensive.
Me: Oh wow, you’re going to Greek! (I wasn’t very cultured back then – still not cultured now either)
Crush: Oh yeah, I’ve always wanted to go to Greece, and I’m finally doing it!
Me: Whattt, how are you going to afford that?
Crush: I got more money this year from FASFA (student loans), so I’m going to use that to pay for it.
Me: How are you going to pay books and everything else?
Crush: You’re going to let me borrow your books?
Me thinking that this would totally get me a date with crush: SURE!
…and that is the story of how I first encountered the idea of vacation loans, but definitely not the last time I got used in the hopes of getting a date.
A primer on vacation loans
For people unfamiliar with vacation loans, vacation loans are personal loans that are geared toward vacations. Interests rates vary from 6-35% at the time of this writing for loans ranging from 2,000 to 35,000 with terms (loan length)varying as well. You can apply for vacation loans almost anywhere with as long as you have a reasonable credit score.
Not all loans are bad ideas. If there is one type of loan that is a spectacularly dumb idea, vacation loans beat all the rest. Outside of memories gained, a vacation doesn’t accomplish anything that you can even touch afterward. The slob who takes out a personal loan to get a bigger screen tv so he can get a better shot of actresses behind is smarter than a person who takes a vacation loan because they have something to show for afterwards. Which is saying something, because that slob clearly doesn’t realize that the internet has tons of professional actresses who don’t wear any clothes.
Vacation loans are designed for people who cannot wait and don’t do the math to realize how much they are paying in the long run. Just for giggles, the table shows how much you would pay for a $5000 vacation if you were my crush who used her student loans, a vacation loan, or if you saved to go.
Amount used to go on vacation
Months To Pay Off
Loan Interest Rate
Total Interest Paid
% interest of the original loan
For both my crush’s case and vacation loans, the amount of money paid in interest could easily be another vacation! That is why you shouldn’t even think about taking a vacation. Lesson learned: don’t be my crush or the millions of other Americans – stop getting vacation loans.
If you would like to read more, please subscribe. If you have any questions, please reach out to us at email@example.com and read our story here.