Is taking a loan out for a vacation a good idea?

My husband and I are in an interesting situation. We have a savings account but don't want to pull from it for our vacation and this summer, because I am not working ( I work seasonally for a school district) our finances have been tight and we are not making as much each pay day as we usually do. My husband returned from iraq 4 months ago and we have not seen his immediate family in about 2 years. We have been planning to go to visit them since before he got back, but his leave for this July was not approved til just recently. Therefore, we could not buy airline tickets in advance and they are now ridiculously expensive. As I said, we do not want to pull money out of our savings and we don't have enough nor will we currently have enough on this immdiate payday for the tickets along with all our other living expenses. We both have decent credit, pay bills on time, don't use credit cards, and are in no debt besides one car payment monthly and a very small amount on an old credit card. We have taken out one loan before for car repairs and paid it back in a timely manner in alloted payments. Is it a good idea to not take out of savings and take a loan for this vacation, because of our weird situation or should we just spend the money for savings? Would we build better credit by taking out this loan and paying it back? I think it's risky to use most of our savings. We won't have trouble paying the loan back, because by the time the allotments start coming out, I'll be working full time again.

2 Answers

  • 10 years ago
    Favorite Answer

    In your situations I'd pull the loan and pay it back like you did the car. If your credit is good and you know you can make the payments, do it. Make sure, though, since you have no job yourself that the amount you borrow can be paid off twice over by only a portion of your savings in case you need to start using your savings to pay it off every month and avoid high interest.

    If you pay it off, it will indeed raise your credit. ^_^

    Another tip- Some airlines allow special discount travel for some situations.. I suggest taking a trip to the airport ahead of time and talking to a flight bookie ASAP to see what can be done since you are not business travel. ^_~ His situation is special as a soldier and they may make special considerations for his case if he will be redeployed soon.

    Enjoy your time together and enjoy.

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  • 4 years ago

    Too bad you had not already paid off that small, old balance on your old credit card. {Do it now, unless you are earning more money in the bank as interest than you are paying on the debt. << That is sort of an LOL reminder you are wasting money.} Step 2 would have been to charge some stuff every month and pay it off in full the next month. - Just dedicate an equal amount of money in the bank for the sole purpose of covering what you charged. [I charge everything, and build up rewards points and $ while paying no interest for these short-term loans every month.] Then, when the credit cards come rolling in with teaser rates like no interest for 6 months, or a year, you could give yourself an interest free loan (by charging the airline tickets, etc) if you deemed the trip to see his relatives was that important. (Seriously, it would be your call.) My credit union will let me borrow money at 4% per year, which is almost as cheap as an introductory credit card, so if you can get that rate or so, a loan would not pinch your finances very hard. BUT stay away from high interest rate loans (even credit cards above 12% and definitely NO payday loan type advances.) {Your bank could start pulling the smallish monthly payments straight from your savings account until your fall paychecks start coming in.} Here's hoping you can find a cheap, last minute airplane ticket on some site.

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