As vacation costs soar, travel vendors have begun offering loans or payment plans. Vacation loans are no better or worse than taking a loan to pay for a TV set, notes Ed Perkins, editor of Consumer Reports. But first, check the interest rate. You may be able to get a better loan from a credit union or bank. If your charge card has a lower rate and available credit, use it. “Don’t max out your credit card however,” says Perkins. “You’ll want to use it for travel purchases.”
Pleasant Holidays has offered payment plans since 1993. Travelers put 20% down with payments beginning 30 days after a trip starts. Repayment can be made up over 18 months. Interest rates, which vary by state, range from 1.5% per month to 1.65%. “If you pay off the trip before the 30-day period, there’s no interest,” says spokesperson Ken Phillips.
Princess Cruises recently launched “Love Boat Loans,” in which travelers pay over a period of 24, 36 or 48 months. Interest rates range from 14.99%-26.99%, based on credit history. There is also a nonrefundable $50 down payment.
“You’ll see an increase in travel loans, especially for cruises which can run from $500-$5,000,” predicts Perkins. But, he warns, don’t go into debt to pay for a trip. Shop around for the best deal and/or the best loan.