Preparing for a honeymoon, the vacation of a lifetime or a road trip abroad always comes at a cost. Travel credit can make a dream come true, provided it is used well. Let’s review the funding possibilities adapted to the trip.
Travel is an escape, a luxury that you don’t mess with. A Sofinscope survey reveals that 56% of French people went on vacation in the summer of 2018, compared to 52% in the same period last year. The average budget is also increasing: it reaches $ 1,500 per household (compared to $ 1,400 in 2017). If “low cost” or collaborative solutions make it possible to reduce costs, some households use travel credit to give life to their project. The credit agencies most often offer the travel loan in the form of a personal loan. The wording of the type of project they propose is actually ” Personal loan ” or ” Project loan ” as in our comparator.
There are two schools in the way of approaching the holidays. Those who take it several months in advance and last minute lovers!
You should also know that the “last minute” reservation is strongly discouraged if you wish to take out a travel credit. There is no immediate credit! Borrowing a sum of money for your vacation implies a certain organization. This same organization is also necessary for its good reimbursement.
An organization that will grant a travel / vacation loan will only be able to pay the funds 7 days minimum after its date of signature. This is the minimum time to get money from a travel credit. The borrower still has 14 days to withdraw. The waiting period for payment of the travel credit – subject to validation of the file – is sufficient to see the prices change, or its offer completely disappear! This is why it is important to carry out several quotes and simulations on the estimated cost of your trip several months upstream. Among the expenses to be included in his travel credit, we note:
Once everything is put together and the cost of the travel credit estimated, it is a question of comparing the offers of the credit organizations. Finding the best APR rate and the ideal repayment period for your travel credit avoids a credit that is difficult to repay. When considering amounts between $ 1,500 and $ 5,000, the credit over 1 year generally makes it possible to obtain better rates than over longer periods. It is obviously advisable to check its repayment capacity over this period. Prudence is the mother of security: this is true in the case of travel credit.
Travel credit most often takes the form of a personal loan. Without proof of use of funds, this loan is the most common to finance all or part of his vacation. Offered by all consumer credit specialists, travel credit in its personal loan formula can display abysmal APR rate differences from one house to another. It is essential to compare the offers displayed, as evidenced by this quick online simulation.
|For a personal loan of 5000 $ over 36 months||Fixed APR rate||Monthly fees||Total cost of credit|
|Best Credit Organization||4.29%||148.08 $||330.88 $|
|Second best credit agency||12.57%||212.71 $||969.88 $|
The best travel credit is almost three times cheaper than its dolphin, for the same credit $ 5,000 over 36 months. If the differences are generally not as large between the two best in our rankings, these results allow us to realize how much we can save by comparing. Whether it is a small loan or a larger one, the economy is often substantial.
Revolving credit is an ideal travel credit for negotiating unforeseen or unforeseen costs. When a line of expenditure is difficult to estimate, having recourse to revolving credit of less than 3000 $ can allow to leave with peace of mind. Acting as a reserve of available money, this travel credit can be reused over time, through reimbursements.
Revolving credit can be settled at any time at no additional cost. Having the ability to repay a loan can reduce its cost. One can for example ask for a payment of 2000 $ to finally use only half of it during your vacation. By repaying the remaining $ 1000 in advance, the total cost of the credit will be recalculated downwards. The monthly payments will be reduced by the amount reimbursed in advance, in addition to the related interest.
This flexibility explains why revolving travel credit is generally more expensive than a personal loan. This criterion makes it easier for organizations to grant this credit to individuals. One can very well receive a negative answer for a personal loan and be accepted with the same organization by requesting its revolving credit formula. Again, it is essential to compare the best rates.
Package trips or stays have been online for a few years. Travel agencies and many other tour operators offer offers of all kinds, assimilated to travel credit. Breaking prices regularly on their stays, they are adept at payment facilities. The best known is the famous payment in three installments.
Loans of less than 90 days are not governed by the consumer credit code. They do not protect the borrower for his travel loan. The legal withdrawal period of 14 days valid for any consumer credit therefore does not apply. These payment facilities mostly include very high fees. Because even if you only pay a few tens of USD for 1000 $ over 3 months, it is generally a rate of 20% that is applied! Application fees may also be applied in addition!
It also happens that some tour operators form partnerships with credit specialists. This is the case of travel agency, which has been linked with Astro finance for several years. The tour operator notably allows you to make a credit with a card. The dedicated travel agency card opens the right to payment up to 10 times, from $ 300. The revisable APR rate indicated by its partner Astro finance for this payment solution is 19.38%…
We have already seen during our surveys on airline ticket credit that the APR rates applied by airlines (or their financial partners) for payments in installments are often excessive. The payment solutions of tour operators are only to be considered in the case of payment in three installments at no cost. You will then have to read the contract carefully to check the terms and conditions.
In this case, they can be paid entirely with the amount released for the travel credit. Any proposal for staggering over a period of more than three months implies an opening of credit. Be careful not to get caught up in an apparently attractive offer from a tour operator or a company offering stays. In some cases could have the effect of quicksand.
We have seen that there was no specific travel credit, but several suitable financing solutions. It should be understood that organizations – like banks – will never ask for proof of use of travel credit funds (see credit without proof). Once you have estimated the cost of your vacation several months in advance, it’s time to compare the offers of the best credit agencies.
One can opt for the depreciable personal loan or a revolving credit to obtain his travel credit. The latter has higher rates but guarantees flexibility in its use. No matter which financing solution you choose, it will generally be better with a specialized organization than with a bank or a tour operator. Performing simulations on our comparator allows you to obtain up to three principle responses in a single form. A saving of precious time, and additional chances of having your file pre-accepted with an organization.
By receiving a positive response in principle and a contract (to download or by email) clearly displaying the proposed rate, one can always leave time to find better elsewhere. Anticipation is the master when you want to take out a travel credit.