Christmas is that time of year when you can spend some stress-free time with your family (or, at least, the week or so when your principal source of stress is your family). However, as sure as bells jingle, those Grinchey bills are going to come around at the end of the month, and your landlord is probably not going to be any more jolly about a late payment than at any less wonderful time of the year. Christmas loans may be just what you need.
Trips, turkeys, decorations and a thousand other joyous trimmings all cost money. Ideally, you’ll be able to take care of all these things out of savings or a year-end bonus from work, but this certainly doesn’t apply to all of us. If you’re strapped for cash, the 25th is drawing near and your in-laws are making noises about coming to visit, don’t panic! It’s not that hard to obtain a little financial help for Christmas; just make sure you understand your options and don’t fall prey to the kind of scams that are unfortunately prevalent this time of year.
Table of Contents
- 1 Are Personal Loans for Christmas Different from Other Types of Lending?
- 2 Small Christmas Loans: The Holly and the Thorns
- 3 Good and Bad Personal Loans for Christmas: Telling the Difference
- 4 Saving Money During Christmas Makes the New Year so Much Better
- 5 Is a Christmas Loan Really for Me?
Are Personal Loans for Christmas Different from Other Types of Lending?
The short answer is that one is a potat-oh and the other a pot-ah-to; they’re the same. A Christmas loan is still an unsecured personal installment loan (for example, Blue Trust Loans, etc.), meaning that you borrow a lump sum now and promise to pay back a certain amount each month until the debt is cleared.
The main difference is that ads for Christmas loans have a smiling Santa on them. Don’t be taken in by the first “QUICK XMAS LOANS FOR BAD CREDIT” billboard you see! You can (and should) also explore regular personal loans if you need some extra cash to ride out December, but look out for special holiday offers, too. Some lenders, for instance, may offer faster approval for returning customers, or the option of starting your payments only once February rolls around.
Small Christmas Loans: The Holly and the Thorns
Christmas loans are typically easy to get, available to nearly anyone, often come with no credit check and can put cash in your pocket within as little as 24 hours. So, what’s the catch?
The first thing to remember is that all short-term loans come with a high rate of interest. This will probably still be lower than charging all your purchases to a credit card, but will still put a dent in your financial freedom for anything from weeks to months to come. Unlike credit cards, each payment amount and date are set in advance. This means that you can plan ahead more easily, but also that “rolling over” a loan may come with high and unexpected penalty fees.
This is the major risk involved in taking out a Christmas loan. If, financially, you’re not where you want to be in the near future, you may end up having to pay more than you bargained for and possibly lower your credit rating. Don’t let this scare you off the concept entirely, though: Christmas loans can be a simple and elegant solution to the money woes so many of us have around this time of year, as long as you look through the hype and do the math. That latter part brings us to:
Good and Bad Personal Loans for Christmas: Telling the Difference
The festive season puts a huge amount of pressure on all of us to put on a show that people will remember in the months to come. Still, it’s never a good idea to take on debt without thinking things through, even while carols are stuck in your head. All too many people focus only on what they can do with the amount they’re borrowing – instead, think about how much you’ll have to pay back. You can split this question into two parts:
- How much of my paycheck will I have to sacrifice each month, which I won’t have available for the things I want at that time?
- How much will the loan end up costing me in total, i.e. how much richer will I end up being if I don’t borrow the money to begin with?
In a sense, there’s a tradeoff between these two in terms of the loan’s repayment period. At the same interest rate, paying more each month means that you’ll end up ahead once the loan is settled. Conversely, you can borrow a larger sum if you’re willing to spend more time paying it back, but this means that the loan will cost you more in the long run.
Payday Loans vs Personal Loans for Christmas
It’s also important to realize that “Christmas” loans come in two basic varieties: one which you’re expected to pay off completely once you receive your next paycheck or two, and another – called a personal loan – which allows you to pay the lender back over several months or years.
Speaking in general, payday loan (also called payday advance) options are sometimes better for small Christmas loans when you know you can make up December’s shortfall in the new year. They do have one major drawback, though: sky-high interest rates compared to personal loans. Payday loan companies often charge all kinds of fees in addition to simple interest. When comparing different offers, the only interest rate figure you should be looking at is the APR number, which is what you’ll really end up paying, any fees included.
Finding the Best Christmas Loan
Realizing that you need more money than you have often come suddenly. This kind of shock makes it tempting to go for the first loan offer you can find, or even fill out an unsolicited application you found in the mail. Please, don’t do this; many of the loan companies that advertise in this way are borderline scam artists who promote bad-credit short-term loans but actually make most of their money when their clients get into arrears.
First, foremost and also secondly: shop around! There are several online services that let you check which loans you’re probably eligible for, literally in minutes and at any time of the day or night. Using one of these also has the advantage of ensuring that any lender you work with has a respectable track record and meets all applicable legal criteria.
Where Can I Get a Christmas Loan with Bad Credit?
Plenty of people find themselves financially stretched here at the end of 2019, yet would still like to do the best for their family – nobody, after all, wants their kids to feel deprived around Christmas time. If this is the case, a small Christmas loan might not be such a terrible idea, assuming that you can squeeze the additional payments into your monthly budget. As long as you pay it back on time, this may even help to improve your credit score and therefore your overall financial health.
There are a couple of companies that actually specialize in Christmas loans for bad credit, but they probably shouldn’t be your first port of call. While people with poor credit ratings will almost always pay higher interest rates, there’s no reason to think that these somewhat shifty enterprises will give you a better deal than more established lenders. If your credit score isn’t all you wished it were, the best policy is to consult one of the websites mentioned above. This will often allow you to find the best borrowing options, regardless of what your financial situation looks like on paper.
Saving Money During Christmas Makes the New Year so Much Better
It’s way too easy to splurge, both in terms of dollars and calories, during the holiday season. But do you actually need to take out a Christmas loan, or is it just a nice-to-have? It always costs money to borrow money, so don’t penalize your future self for the sake of a few extra pieces of tinsel.
You and your family should have a budget for Christmas and be willing to stick to it: this helps you focus on the things that give you joy by finding ways to save on what’s less meaningful. Doing so will also show you how much you really need to borrow, which may be much less than you feared.
If, for instance, you’re the kind of person who feels compelled to buy a gift for nearly everyone in your life, try to think of some smaller yet thoughtful gifts that will be appreciated just as much. Remember that it’s always the experience that counts, not the amount you spend.
Speaking of experiences, a road trip with small children can be either a merry sleigh ride or a nightmare, depending on how the little monsters are feeling on the day. Still, if you take the car for the same amount of time you’d typically spend traveling to and from the airport and standing around in it, you can easily cover two or three hundred miles before time even becomes a factor. You may well spot numerous similar saving opportunities if you take a close look at each of the major items on your Christmas budget.
Finally, though this may be of little help to you at the moment, it’s never too early to start saving for Christmas. If, next year, you put away a little money each month and do your gift shopping when there are sales rather than at the last minute, you won’t even need a loan for Christmas expenses when December rolls around.
Is a Christmas Loan Really for Me?
Christmas loans are fast, convenient and – if used correctly – affordable. Still, they’re only one tool in your arsenal, and it never hurts to find out what your options are:
- Cash out a short-term investment. One of the reasons for putting some money into things like tradeable bonds and mutual funds is that it’s available at short notice when you need it. This obviously doesn’t apply to retirement or emergency savings; those have a different purpose.
- Ask visiting relatives to help out. It’s pretty unreasonable to expect one family to shoulder the burden of hosting, entertaining and feeding a dozen or more people, so why not suggest that the Christmas meal be a potluck and allow people to show off their favorite recipes? Equally, don’t neglect to offer a little assistance if you’re spending the holidays at someone else’s home.
- Take the time to look into secured types of credit. With a car title loan, for instance, your vehicle serves as your pledge that you will pay back any money you borrow. Loans like these offer better interest rates than even the best personal loans, but there are other issues to bear in mind: a lender might not be willing to lend you only a few hundred dollars in this way, and they might well insist that you upgrade your insurance policy.
- Study your credit card’s policies a little more closely. Many of them offer rewards points, especially on travel-related expenses. These may be enough to offset the high-interest rates they charge – if not, maybe it’s time for you to switch to another credit card?
Christmas may be a time for peace on earth, but it sure causes mayhem in your personal finances. If you’ve run into a situation where you’re a few reindeer short of a full sled team, you’re certainly not alone. A Christmas loan may be just what you need to bridge the gap. Just make sure that you work with a reliable lender; for whatever reason, the loan sharks like to come out at the same time the elves do.
Thank you for reading. We hope that your Christmas in 2019 will be the happiest!
Have a great holiday!