According to the American Research Group, shoppers spent just over $800 on holiday gifts in 2015. Between gifts for your significant other, your parents, your siblings, and your children, it's easy to spend a few hundred, even on small gifts. If you've been laid off or simply do not have enough in savings due to emergency bills or unexpected expenses, there are ways to afford memorable Christmas gifts in a financially savvy manner.
What Are Christmas Loans?
Christmas loans are quick loans you take out with a bank, credit union, or financial organizations that help you cover the cost of holiday shopping. These loans do not have to be expensive, many times the interest rate is significantly lower than that of a credit card. You borrow what you need and then take a few months or even a few years to pay it off.
While the best interest rates for Christmas loans go to those with the highest credit scores, people with bad credit can still get Christmas loans with no credit checks. The interest rate is going to be higher, but Christmas loan interest rates can still be lower than many credit card interest rates.
How Do You Qualify?
To qualify for a Christmas loan, you must be at least 18 years of age. Applications are usually processed online, saving you time. You need to answer a few questions about your income or any financial benefits you receive. Many companies then use the information you've provided to negotiate the lowest interest rate for you with a variety of lenders. You get to pick the rates and terms that best fit your needs. Once your application for a Christmas loan is approved, you can have the money automatically deposited to your account in as little as 24 hours.
Taking out a loan for Christmas shopping can help ensure your children or family have a super holiday, even if you've had a hard time with a layoff, bad credit, or some other financial hardship. As you have say in the length of the loan and the interest rate, you control what your monthly payment is.
Christmas loans often have rates lower than credit card rates, so you will save money. You also have a specific period of time in which to pay it off, so you know that if you take out a three-year loan, you'll only have that loan for that amount of time and then you're free of that debt. It can take decades to pay off a credit card, especially if you only make the minimum payment each month.
As is true of any loan, you are required to repay the money over time. Be careful when choosing the terms. An unsecured Christmas loan will not require you to put down any collateral, but the interest rate will be higher. If you choose a secured Christmas loan, whatever you've listed as collateral can be repossessed by the bank or lender if you fail to make payments on time. While secured loans have better interest rates, you may not want to risk losing your car, home, or other personal items if something happens and you cannot pay the money back.