The world is big, and travel options are cheaper than ever, but that doesn’t mean that there aren’t restrictions. Big trips cost money, and big-ticket items like caravans can cost more. Trying to finance these items when you either don’t have a good credit score or haven’t yet built up a good enough credit history is tricky, but it doesn’t have to be.
The good news is, there are many ways that you can travel and pay for big-ticket items, even with bad credit or a poor credit history.
Ways to Finance Your Travel Dreams with Bad Credit
When it comes to your options right now, you’ll have two:
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Pay in Instalments Before Your Trip
You need credit to buy something up front and then pay it off later. There are no such stipulations if you book a trip well in advance and then pay off the cost in installments before you leave. Many travel sites offer this option to help you spread out the cost and get it all paid up by the time you jet off, but it’s still not a universal option. You will want to research ahead of time to find the travel sites that allow for this method of payment.
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Find Bad Credit Loans
The previous option works if you are going on a short-term trip or an organized trip. It doesn’t help if you want to, say, buy a boat or a caravan. For these dreams to come true, you are going to want to find the best loan option you can with a poor credit history. Know your options for loan providers and know that your credit score will start going up the second you start to make your repayments.
Refinancing your loan when your credit score improves is crucial to help you lower those credit costs in the long run. This is particularly important if the reason you had to get a poor credit loan is that you don’t have a credit history, not because you have ever been in debt. Many young people just starting out will have this problem, even if they’re looking to buy a motorhome full-time to better manage costs.
Building Up Your Credit History for the Future
Even if you are able to finance something when you have a poor credit history or bad credit score, you won’t want to keep things the way that they are. Your goal is to work on improving your score and history as fast as possible. Your loan will absolutely help do this as long as you pay it back on time every month.
Keep an eye on your score and history, and when it is time, you will want to refinance your loan so that you can get a better deal now that you have a better history.
Save and Pay it Off
Lastly, it is important to remember that many loan providers will allow you to pay off additional chunks of your loan, sometimes for a fee. This way, if you start making more money or are gifted a lump sum, you can put that towards your loan and pay it off faster.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin