Budgeting can be one of the most tricky and stressful elements of planning for a holiday, especially if you’re not in the best financial health.
Sure, you can dip into your savings or ask friends and family to help you with expenses, but if the money isn’t there, it isn’t there, and that kind of revelation can be heartbreaking.
Luckily, even if you find yourself with a less-than-desirable credit rating, there are things you can do to secure a loan and get your dreams back on track.
Here are some tips to help you secure a loan with bad credit for your next trip!
Shop around for your loan
Don’t get disheartened if the first place you apply to for your loan rejects you. There are many different places out there that offer loans, and just because one turns you down, that doesn’t mean the next one will.
You’ll find lots of outlets online that offer bad credit loans to suit lots of different levels of financial need, so make sure that you keep shopping around until you find the one that’s right for you.
If you need to, reach out to your chosen site’s customer service representative to explain your situation and discuss what your options might be. You could be surprised!
Borrow only when you can afford repayments
One of the biggest things that often trips people up when it comes to applying for loans is, of course, the inability to make repayments.
We know it sounds obvious, but you shouldn’t borrow money unless you’re sure you’ll be able to repay it. That’s one of the paradoxical problems with loans, but it’s important to remember it.
If you can’t repay loans, then you may find yourself in deeper debt than before you applied, so don’t use loans as a bandage for long-term financial problems.
Find a guarantor
Often, when it comes to applying for bad credit loans, a guarantor can help you to secure them, so try to find someone close to you who’s trustworthy.
Guarantors essentially guarantee that if you don’t repay the loan, they will. They act as a sort of failsafe for the lender, so it should be someone who’s financially solvent and able to pay back the loan.
Try to explain to your guarantor that the loan is to help you travel, but try not to make your trip sound frivolous, or they may (perhaps rightfully!) point out that the trip isn’t essential, and therefore, neither is the loan.
Speak to friends and family for help
There’s nothing that says your loan has to be arranged through an official provider. If friends and family are happy to give you a loan for your trip, then your problem is solved.
Make sure you have a full and frank conversation with your friend or family member about loan repayments, though; it’s important to stress this will be a loan and not just a gift on their part (unless they’re happy to provide that, of course!).
You should treat this loan like you would any other, but it’ll likely have more lenient repayment “terms” because it comes from someone you know and trust already.
Get on the electoral register
It might sound a little silly, but one of the biggest problems that often trips people up when it comes to bad credit is the fact that they’re not on the electoral register.
There can be many reasons for this, but in the UK at least, if you’re not on the register, then you may find it more difficult to secure a loan, as lenders won’t be able to cross-reference information you provide.
It’s quick and easy to sign up for the electoral register, and the difference it could make to your credit rating easily outweighs any effort you may have to expend in the application process.
Correct any mistakes on your credit history
Sometimes, your credit history can contain incorrect information, and that incorrect information can damage you when it comes to applying for loans.
It’s worth taking the time to pore over your credit history and make sure that the information on it is entirely accurate, because if it isn’t, you could be hamstringing yourself during the loan application process.
Even if your credit history does contain correct information that may make you a less desirable prospect for lenders, that’s still preferable to being rejected for a loan for the wrong reasons.
Apply well in advance of your trip
This one’s a travel-specific tip. If you’ve got a holiday planned, make sure that you apply for any loan you might require well in advance of actually leaving.
If you’ve got a bad credit rating, there is, unfortunately, a decent chance you could be rejected for a loan, and there’s nothing more heartbreaking than that happening right before you depart.
Make sure you’re making the necessary arrangements for loan applications long before you actually leave for your trip if possible, because this will spare you disappointment later down the line.
Budget extensively
Creating a travel budget is important no matter the circumstances, but it’s especially important when it comes to applying for a loan.
You should know exactly what every penny of your loan is earmarked for. If there’s anything outstanding, you should be using it for repayments rather than any extras.
This will also help you to approach lenders; if you’ve got a plan for exactly what you’re going to use the money for and how you’re going to pay it back, lenders may be more willing to lend you money.
Get a credit-building loan
Some types of loans are created especially to help you build your credit score back up, and these loans can be very helpful when you’re trying to get back on track.
Credit-building loans often don’t actually release the funds to you immediately; they work a little like savings accounts, so you’ll get the full amount back once you’ve repaid it, so to speak.
If you’re struggling to find a lender who will provide a loan for you, then a credit-building loan can be a good way to shore up your chances.
