Holiday Loans: Holiday spending can add up fast, and often holiday debt is the result. When a consumer wants to obtain a personal loan, they must understand what a person bank or government institution will deem as an appropriate use of a borrowed funds. Most lenders will take into account the applicant’s personal situation, though there are certain instances when it doesn’t matter if you have that hanging on your wall.
What Are Holiday Loans?
Holiday loans are typically small-value, short-term loans that can be obtained in a few hours by filling out an online application and getting a quick approval. It is a type of credit in which a lender will advance a specified amount of money to a borrower in order to meet a holiday spending need.
While these loans are meant to provide customers with emergency cash, they can also be very costly. A customer could pay $30 for just $250 if their loan comes with a three-month term and 36% APR. Holiday loans are designed to provide customers with emergency cash. They can be very costly.
In many cases, consumers can make more money by making small deposits over time into a savings or checking account rather than receive a lump sum of cash.
Consumers that are currently working can refinance their debt into a lower interest rate. In addition, depending on the terms of their loan and the available balance, they may be able to request that the total balance be paid off.
Types of Holiday Loans
There are different types of loans for holiday shopping. Some people opt for a traditional loan from a bank or credit union. Others go with a merchant cash advance from a company like First National Bank. Some people opt for a traditional loan from a bank or credit union.
These loans carry higher interest rates, but can be useful for people who need to purchase larger items, such as vehicles or a home. Others choose to use a cash advance from a company like First National Bank. Cash advances can be smaller, but the interest rate charged is generally higher than that for a bank loan.
They are best for purchasing a few items at a time, such as cell phones or laptops. A service like PayPal allows people to send money to family and friends without charging fees.
Advantages of Holiday Loans
Advantages of Holiday Loans are that people are able to borrow smaller amounts of money to cover their living expenses during the holidays. They are also a good alternative to reaching into savings or carrying credit card debt because they involve no interest.
Disadvantages of Holiday Loans
There are two main disadvantages of holiday loans. First, the interest rates charged on these loans can be quite high. This is the case regardless of whether they are purchased with a credit card or with cash. Second, there is often a fee associated with purchasing these loans. Fees can range from $5 to $50. The fees are added on top of the interest rates, which can quickly negate any benefit of using this type of loan.
How to Apply for a Holiday Loan
Taking out a holiday loan is a good way to obtain a quick sum of money, but there are things you should consider before applying.
Consider if you need the money for necessities like food and rent, or for luxuries like holidays and furniture. If you can’t afford to pay back the loan when it becomes due, don’t take it out. If you can, try to qualify for one with a lower interest rate and fees. Research the terms of the loan you are considering.
When you apply, ask the lender to put your application in a “nice pile” and avoid those with fees or high interest rates. Consider using a credit union instead of a large bank. To help make sure you’re in a position to pay the loan back, get an estimate of your monthly expenses and look for ways to reduce them.
Personal Loans for the Holidays
The holidays are here! And they are wonderful. Spending time with family and friends, giving gifts to loved ones, all things that make the season merry and bright. But these moments don’t come without a price tag. And if you’re like many people, you might not have the cash to cover all your expenses. Personal loans for the holidays are a way to help you afford the celebrations you want, but don’t want to spend the holiday worrying about bills.
Depending on your financial needs, you might qualify for a short-term or long-term loan. A short-term loan will allow you to take advantage of the season’s sales and special deals.
You can use your loan to buy gift cards, pay for the gifts your loved ones want you to get them, or anything else you might do to enjoy the holiday cheer.