Things to Keep in Mind When Applying For Holiday Loans

Have you ever wondered why it seems more challenging every holiday to afford the gifts you want to purchase for your family members and friends? If you’re feeling that way, you’re not alone. Costs are going up everywhere, not just on gas and groceries. With supply costs going up, even things like toys and clothing are feeling the weight.

This can put quite a burden on the holiday spirit. This is incredibly frustrating since the holidays are intended to be a happy time. Sadly, it’s becoming a time of financial stress and discord for many. As a result, many consumers are turning to short-term loans, aptly nicknamed holiday loans, to help cover the cash shortage. These loans are extra helpful for gig workers or those without paid time off or who experience pay gaps during the holidays.

So, what do you need to know about applying for holiday loans? We’ve got the inside scoop.

What is a Holiday Loan? How Can They Help?

What is a holiday loan, in the first place? Well, as the name implies, these loans can help you get quick funds to help pay for expenses that occur during the holidays. Here are just a few examples.

Holiday Loans Can Help with Travel Expenses 

It’s not uncommon for families to pack up the car or even head to the airport in pursuit of visiting long-distance family members and friends for the holidays. In fact, a recent article from Forbes shared that nearly 104 million people drove to a holiday destination in 2023. So, if you have to hit the road each holiday, you’re not alone.

But traveling these days doesn’t come cheap. There are travel, lodging, and, of course, expenses for amenities, food, etc. If you’re a parent, don’t be surprised if Scotty or little Suzie wants some souvenirs from the trip.

Holiday loans can help cover those expenses until you have the extra funds to pay them off.

Holiday Loans Can Help Pay for Gifts

While using a short-term loan, such as an installment loan, to pay for holiday gifts is not always the best option, these loans can certainly help. Many consumers turn to short-term loans to help cover gifts, especially when purchasing gifts for kids.

This said, if you decide to take out a holiday loan to cover gift expenses, ensure you do not bite off more than you can chew. It is super important that you have the funds available as part of your seasonal budget to make the monthly loan payments and fulfill all other loan obligations. If you miss a payment or fail to pay off the loan, your account can be turned over to collections, and your credit score may plummet. 

What Should You Keep in Mind When Using Holiday Loans 

As we implied above, responsibility is key when using holiday loans. The most important thing to remember is that these funds do not belong to you—the intention is that you will pay them back according to the terms of your loan agreement.

Here are a few things to remember when applying for holiday loans.

Budgeting for Repayment

Before you even apply for a holiday loan, look at your budget. Figure out how much money you have coming in and going out each month by leveraging the 50/20/30 budgeting approach. Ensure you can fit the loan repayment into your monthly expenses without straining your finances. Planning ahead like this will help you comfortably make payments and avoid financial stress later.

Itemizing Your Expenses So You Know Exactly What You Need the Loan For

One smart way to use holiday loans is to list all the holiday expenses you expect—everything from gifts to travel costs. This helps you understand exactly how much you need to borrow. You avoid borrowing more than necessary by itemizing your expenses, saving you from extra debt and higher interest costs.

Review Interest Rates to Make Sure You Are in a Good Financial Position After the Holidays

Compare interest rates before taking out a holiday loan. Higher rates can significantly increase the amount you'll pay back, possibly affecting your financial health after the holidays. Ensure the loan terms don't put you in a worse position financially once the festive season ends.

Shop Different Lenders for the Best Payment Structure/Rate

Don’t settle for the first loan offer you get. Shop online with different lenders to find the best interest rates and payment terms that fit your budget. Some lenders may offer lower rates or more favorable terms based on your credit history or borrowing amount. Taking the time to compare options can lead to significant savings and a better financial deal overall.

Get Started Today with Holiday Loans at Cash Store 

Whether you need a holiday loan at Christmas or any other time of the year, Cash Store is here to help. We offer installment loans designed to help borrowers maximize their finances and cover themselves in a pinch.

To get started, complete our online prequalification application. Cheers to responsible borrowing!

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