Christmas is approaching, and you must be quite excited about ticket booking, decoration and shopping for the best Christmas tree, chocolates, and invitations. Many individuals rely on credit cards to make occasional purchases. Is it the only best option available?
Well, no one wants to kick-start the New Year with a maxed-out credit card bill. In addition, the worse, you do not want to carry the debt onto the next month. Though it is a revolving debt, you must pay it in full by the deadline. Thus, explore affordable options before getting started.
How about Christmas loans?
It is one of the best ways to relish the most interesting purchases without going budget overboard. Moreover, it is a cheaper alternative to credit cards and overdrafts. It is because, with a good credit score and well-maintained finances, you can spot favourable terms. You can use these loans for Christmas-related purchases.
What can you use the Christmas Loans for?
As evident from the name itself, you can use the Christmas loans for any of the below purposes:
- Booking accommodations
- Sending gifts to your loved ones
- Online and offline shopping
- Cover your Christmas-specific trip needs
- Planning ice skating for your kids
- Food and dinner preparations
So, you can use the loans for purposes like these.
Christmas loans are the best to cover up your occasion requirements. One can tap them anytime to get short-term or medium-term financial assistance. On the contrary, Christmas loans can turn out to be the most expensive ones. Thus, there are some negative aspects apart from the positive ones.
The blog explores some positive and negative aspects of Xmas Loans.
Pros and Cons of Christmas Loans
Let’s analyse the advantages and disadvantages of Christmas loans in detail. It would help you decide whether or not they are the right fetch for your needs.
PROS OF CHRISTMAS LOANS
1) Help you with budgeting
Occasions are the peak time when individuals go overboard with their budget. It is the excitement of hosting a gala dinner or a meet-up. Everyone wishes to invest the best of their savings to relish it. However, spending more than what the budget permits leaves one without savings.
Here, Christmas loans help individuals keep track of spending. It is because one only borrows a specific amount. He must meet the needs within the amount borrowed. Or else, borrowing extra implies additional interest that one wants to avoid. Thus, one plans to use the money in the smartest way and avoid overspending.
2) Use it for multiple Christmas purposes
Do you seek flexible finance that allows you to cover all your expenses? Christmas loans are one of those ways. Whether you need to buy new outfits or send Christmas party invitations, use the same loan.
However, you must borrow a flexible amount according to the purposes you want to use it for. If you’re going to use it for more than one purpose, you do not need to disclose it. Lenders approve the loan if your present credit and financial situation meet the mark.
3) Fixed payments and interest rates
Individuals with part-time profits or income may benefit in some way. You may benefit if you borrow an amount you are comfortable with, even if the business slows down.
Alternatively, it is the best way to finance Christmas needs for individuals with standard and regular income. Fixed instalments and interest rates reveal the comfort of budgeting. One can easily budget for and ensure time payment. Moreover, it does not change with any drop in the economy as the interest rates remain unchanged or fixed.
These are some positives of Christmas loans that you may cherish. Apart from these, you get the loan the same day and alleviate your financial stress.
However, you must know the whole story. Analyse the below things before applying for the Christmas loans.
CHRISTMAS LOANS- ASPECTS THAT YOU MUST NOT IGNORE
While having a Christmas loan for all your needs is helpful, you must consider the downsides too. Be aware of the below aspects and choose the right one for your goals:
1. Incredibly high interest rates
It is one of the aspects that you must be careful about. These loans are secured and unsecured in nature. Thus, borrowing it for a longer term entails high interest rates. Moreover, individuals applying with bad credit may get competitive rates due to matters of security.
However, you may limit the risk of availing a costly-interest loan by borrowing less amount. Identify the possibilities to clear the loan before the due date. It would help avoid budget extremities.
- Impact your credit score
Missing a few payments on the loan or non-repayment could have a long-lasting impact on your credit score. It is usually a 12-36 month loan, and thus, you must make regular payments. It would help you ensure an intact credit score.
Identify the impact of missed payments before applying for a loan. It would help you budget for a flexible amount and avoid penalties later.
3. May lose the asset
As mentioned above, one may opt for a secured or an unsecured loan. If you opt for a secured loan, you do so by pledging an asset. It acts as a security; you get it back after completing the payments. However, if you miss the shot or cannot pay in time, the lender seizes it.
To avoid this, analyse the capability to make payments over a long time. Secured loans reduce the repayments and interest rates. Thus, you get far more affordable terms than on unsecured Christmas loans.
However, always try to make regular payments on Christmas loans. If your finances fall, contact the lender immediately for a solution. If you share good bonding and are cooperative, the lender may help you with a new schedule or provide a personalised solution. Under this, it grants the borrower to clear the loan within 15 days. However, if you have bad credit, you may not qualify for secured loans. It is because lenders demand payment guarantees for the long term that the poor credit profile lacks. In this case, personal loans may help. Individuals with low credit history and regular income may qualify for better rates on an unsecured loan. Moreover, you do not share the fear of losing the precious asset.
If you seek an independent financial solution for Christmas goals, get personal loans for bad credit with no guarantor required. It is one of the best ways to finance your needs without disclosing them to others.
Bottom line
You must be aware of the pros and cons of Christmas Loans you must be aware of. It helps one decide right as per one’s finances, credit score and requirements. Identify whether a secured or unsecured loan is manageable with your current finances. If yes, you can ensure the best Christmas journey without major financial hiccups.
Jessica Rodz is the Senior Content Writer at Cashfacts. She has a long career in the field of content writing and editing. Jessica has the expertise in the UK lending marketplace where she has worked with 7 different lending organisations and acquired many responsibilities from preparing loan deals and writing blogs for their websites.
At Cashfacts, Jessica is managing a team of experienced loan experts and doing a major contribution in guiding the loan seekers via well-researched blogs. She has done graduation in Business (Finance) and now currently doing research papers on the UK financial sector.
