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Should I Take Out a Vacation Loan?

Should I Take Out a Vacation Loan | MECU | Jackson, MS

We’ve made it through 2020, vaccines are on the rise, and the light and the end of the tunnel is fast approaching. While most of us reluctantly endured isolation for the hope of a better tomorrow, we were dreaming of the opportunity to one day escape the routine in exchange for new experiences. We’ve spent countless hours binging the latest Netflix series, ordering in, and scrolling our phones just for the hope of exploring once again outside our four walls. 

Nothing has taught us more, that life is meant to be lived, cherished, and traversed. If this is true for you, then you’ve likely already picked your next destination. Maybe you’ve browsed Airbnbs in Paris, booked a refundable jungle swing excursion in Bali, or you’ve researched country-side Italian villas. Wherever you’re going, your next step would be to establish funds for your trip. While you may have prepared for necessary items like bills and everyday needs, not all of us are capable of saving for personal expenses during the pandemic. 

You might be wondering, why should I consider taking out a vacation loan for that 5-day resort stay? Here are some pros and cons about unsecured personal loans and why they may be an ideal option for you and your family getaway. 

What is an Unsecured Personal Loan or Vacation Loan? 

An unsecured personal loan is a fixed-rate loan that does not require collateral, unlike secured personal loans. Collateral can be either a savings account or a certificate of deposit for example, which would secure your lower interest rate. While interest rates are higher for unsecured personal loans, they are ideal when collateral is too risky to put down or non-existent. Unsecured personal loans can be used for things like vacation expenses, home repairs, debt consolidation, or other unexpected emergencies. 

Pros and Cons of Getting a Vacation Loan

Before diving into the application process, it’s important to weigh out the pros and cons of getting an unsecured personal loan. Most financial advisors will suggest against accruing debt for any “non-essential” expenditure; however, the immense stress of surviving a global pandemic may qualify. Not to mention, there are times when emergency situations arise that require travel and may be the cheapest option at the time. 

As long as you ensure the monthly payments fit into your budget and that you can commit to paying off the loan in time, you shouldn’t cancel out the opportunity. 


  • Not having to wait or worry about saving up for a dream vacation 
  • Quick access to emergency travel funds (for moments when hardships arise like family illnesses or funerals) 
  • Typically lower interest rates than credit cards
  • Can improve your credit score if paid on time 


  • Absorbing long-term payments that may hinder your budget 
  • Interest charges that may make the trip more costly 
  • Higher interest rates if your credit is poor 
  • Having an additional loan payment may hinder your ability to gain a more critical loan 

Alternatives to Vacation Loans 

If the cons outweigh the pros, then a vacation loan may not be in your best interest. Does this mean you shouldn’t live your “best life”? Not necessarily. Here are some alternatives to financing your vacation without taking out an unsecured personal loan. 

  • Travel Credit Cards – At Members Exchange Credit Union, we offer a reward-based credit card that is perfect for travel. The Visa® Rewards Credit Card allows you to choose your selection of cash rewards, gift cards, travel discounts, and more. 
  • 0% Credit Card – Choose between the above-mentioned reward-based credit card or our Visa® Platinum Credit Card. Both of our credit card options include 0% APR on balance transfers for the first 6 billing cycles after the card is opened. 
  • Personal Line of Credit – Rather than getting stuck with a fixed rate that caps your loan amount, a personal line of credit can provide you access to a larger amount of money borrowed that you pay back on your own timeline. The interest rates for personal lines of credit are variable – the only catch is that PLOCs require a good or excellent credit score. 

How to Apply for a Vacation Loan 

If on the contrary, the pros outweigh the cons, and you’ve decided a vacation loan is perfect for you, here are the three steps you need to take in order to apply: 

  1. Decide How Much To Borrow – At Members Exchange Credit Union, our unsecured personal loans can provide anywhere from $500-$25,000. 
  2. Submit a Loan Application – Our easy-to-use online application process means you don’t have to worry about visiting a local branch to apply. If you’re a member, you can simply follow the instructions in our online application form
  3. Wait for the “fun”-ding to arrive – Once your application is sent, the approval process is short and sweet. Afterward, it will be a matter of days before your account is awarded the loan amount. 

Vacation Loans in Jackson, MS | Members Exchange Credit Union 

Whether by plane, boat, or train, Members Exchange Credit Union can get you there. Don’t let your finances stop you from enjoying that much-needed trip. Press reset when you apply for an unsecured personal loan for your next vacation today! Stop by one of our local branches in Ridgeland, Byram, or Pearl, MS, or contact us at (601) 922-3350 to speak with a Personal Service Representative.