You work hard. You need a break. You need a vacation. But this time you need more than just a weekend at the lake. It’s time for the big one: the dream vacation.

Whether your dream vacation idea is a two-week safari in Africa or an all-inclusive resort in Bali, the price of relaxation can be quite steep, especially for a family. While many would advise saving up for a lavish getaway, there are other ways to pay for it. A home equity loan may be an option if you are a homeowner.

What is a home equity loan?

A home equity loan is a loan secured by the equity in your home. Your net worth is determined by the value of your home compared to what you paid on the mortgage. A home equity mortgage will allow you to borrow some of that equity, usually no more than 80%, to use as you see fit and pay it back in fixed installments, with interest over the next few years.

Home equity loans are paid in a lump sum so the funds can be used for anything. Many people use them to renovate their homes, pay off high-interest debt, or pay for their education. But paying for a well-deserved vacation is also an option.

Determine your budget

The first step in deciding how to pay for your dream vacation is determining how much it will cost. With ever-increasing airline prices, transportation will be your number one expense. Flight prices are generally higher in summer and during holidays when children are out of school. Plane tickets also depend on when you buy them and what day of the week you want to travel. If you’re not traveling with kids, consider winter, early spring, and fall for your trip. Known as shoulder season, this can save money on flights and hotels.

If you decide to drive rather than fly, consider the wear and tear on your vehicle and the price of gas. Another option is to rent a car to avoid wear and tear. Recent rental car shortages may also have an impact on rental car prices. If you’re flying, think about how you’ll travel around your destination. Is public transport accessible? Will you do guided tours including transportation?

Housing is the second largest expense. If you have a family, you may need to consider booking multiple hotel rooms or considering a short-term rental. Once the food and entertainment are added in, it’s easy to see a price tag of $10,000 for a week’s international vacation for a family.

Home Equity Loan vs. Credit Cards

Unless you’re willing to put in the time and have the discipline to save for your trip ahead of time, you may have to go into debt to pay for that dream vacation. While most people would use a credit card to book airline tickets, hotels, car rentals, and pay for food and incidentals, credit cards typically have higher interest rates. These interest rates are based on a prime rate plus a certain percentage and expressed as an annual percentage rate (APR). Currently, the average credit card APR is 19.49%, according to the latest Investopedia survey.

Credit cards charge interest when you carry over a balance from month to month. Although there are occasional promotions that offer zero percent interest for a period of time, not everyone is eligible for these cards. If there’s a chance you might have a balance, it’s worth finding a low-interest option.

A home equity loan is considered a secured loan because it is backed by collateral: your home. Home equity loans generally have much lower interest rates. However, many lenders have a minimum threshold for the amount they will lend. Although it varies, $15,000 is a common minimum limit. Closing costs are also involved, so your final bill will be between 2% and 5% higher to cover set-up costs, appraisals, recording fees, etc.

Let’s compare a loan of $15,000 for an African safari for a family of four. If this family borrows $15,000 through a home equity loan with a repayment term of five years, their interest rate would be 6.1%. With a monthly payment of $290, they would pay approximately $2,440 in interest charges over the life of the loan. This does not include setup fees, which can vary between $300 and $750.

By comparison, if the same $15,000 were charged to a credit card and paid over the same term at an interest rate of 19.49%, the family would pay over $8,000 in interest and have a monthly payment of $394. If they wanted to keep the monthly payment close to $290, it would take eight years and four months and cost $15,234 in interest.

Home Equity Loan Risks

Obviously, home equity lending has a financial advantage over using a credit card, but it comes with risks. Although you have a better interest rate, you will also add another payment to your monthly bills. And if you find you can’t repay your home loan, you risk losing your collateral, in this case, your home.

The essential

Ideally, the vacation will be affordable enough that you don’t have to worry about how to pay for it. But for big once-in-a-lifetime trips, you might consider financing. If you’re choosing between a home equity loan and long-term credit card debt, a home equity loan is the most cost-effective option.