From Christmas parties to special presents under the tree, the holidays can come with a lot of financial pressure.
Nearly 80% of Americans stress out about overspending for Christmas or the holidays, according to a 2018 Credit Karma survey — and there are lenders that market loans for the holidays specifically for that spending.
If you haven’t saved — or haven’t been able to save — for the holiday spending you want to do, and you’re thinking about taking out a Christmas loan, here are some important things to consider, and some other options to look at.
If you’re set on borrowing for the holidays, here are a few things to consider.
- Prequalification — Some lenders let you prequalify for a loan by pulling a soft credit inquiry, which won’t affect your credit scores. Submitting several prequalification applications can help you narrow down your list of lenders. USA Cash Money works with some lenders who does just that.
- Monthly payments and a fixed timeline — Christmas loans are installment or personal loans. That means they’ll have monthly payments due over a specific amount of time — making it easier to plan into your budget.
- Interest rates — Depending on loan terms and how your credit looks, personal loans tend to have lower interest rates than credit card interest rates. So taking out a personal loan may save you interest as opposed to charging all of your holiday purchases.
- Fast funding if approved — If you choose an online lender, generally the application and funding process is quick and easy. If you’re approved, you might even receive your loan the same business day, giving you more time to prep for the holidays.
Planning ahead for the holidays and budgeting for your expenses is the best way to enjoy the season while avoiding a holiday financial hangover. But that’s not always possible — life happens, and sometimes basic necessities cut into our holiday budgets.
While a Christmas loan may allow you to spoil your family, it’s financially healthier to budget and set money aside for holiday expenses if you can. Start today by stashing some holiday cash in a designated savings account. You may even enjoy the holidays a lot more knowing that you can ring in the new year without added debt.