The holiday season is right around the corner, also known as one of the most expensive times of the year. For many, this means extra spending on gifts, travel, and festivities. While it’s a time that’s full of fun and joy, it can also strain your finances if you don’t manage your spending properly. So, when unexpected expenses pop up or you want to spread out costs, taking out an installment loan or looking for holiday loans might seem like a good option. But if your credit isn’t great, you might worry about not getting approved for the extra money you need. Fortunately, holiday loans for the season are still accessible to people with bad credit. You just need to know where to look and how to approach the process.
In this guide, we’ll explore when an installment loan can be a responsible option during the holiday season and how to secure one to help with holiday expenses, even if you have bad credit. We’ll also explain how these loans work, and what things you should consider before you apply. By the time you’re done reading, you should be able to decide if an installment loan is right for you this holiday season.
What is a Holiday Loan?
Before we dig into how a holiday loan could help you this holiday season, it’s important to first understand what they are and how they work.
A holiday loan is a type of personal loan which can be used to help cover seasonal expenses such as gifts, holiday meals, and decorations. These loans are typically unsecured, meaning you don’t need to provide collateral. These loans may be offered by banks, credit unions, and online lenders, which tend to be smaller than traditional personal loans. They usually come with manageable repayment terms, often between 12 to 24 months.
Holiday loans can be very beneficial during the holiday season and can offer an alternative option than other personal loans, in addition to potential fixed interest rates, flexible use, and quick access to cash when you need it the most. This may be a useful option if you’re looking to combine holiday purchases or tackle one-time costs, such as large gifts.
When a Holiday Loan Might Make Sense for Holiday Expenses
Did you know that the average American spends about $1,000 on Christmas each year?* Between gifts, food, décor, and other things, holiday spending can quickly spiral out of control if you’re not careful. But a holiday loan might be able to help ease the burden. Here are a few examples where a holiday loan can be a helpful way to manage your expenses this holiday season:
Cover Big-Ticket Items
Planning to purchase an expensive item such as a new laptop for a family member? Using a holiday loan can allow you to spread out the cost over several months instead of having to pay for it in full upfront.
Handling Unexpected Holiday Expenses
From last-minute travel changes to emergency home repairs, unexpected expenses can pop up during the holiday season. Imagine this – your family is coming into town for Christmas and a few days before their flight, your water heater breaks… What are you going to do?! In situations like this, a loan can provide quick access to cash when you really need it. This can allow you to manage these costs without disrupting your holiday plans.
What to Consider Before Taking Out any Holiday Loans this Season
While a holiday loan can be a helpful tool, it’s important to weigh your options carefully before you commit. Here are a few things you should consider:
Interest Rates and Fees
Compare the interest rate on the holiday loan to what you’d pay using other financing options. Also, make sure you understand any additional fees, such as origination fees. These can increase the overall cost of the loan.
Your Current Financial Situation
Are you able to take on additional debt? Make sure you’re confident you can make regular monthly payments over the life of the loan.
Loan Amount
Only borrow what you need. While it might be tempting to take out a larger loan, remember that you could be be paying it off in multiple payments. Avoid stretching yourself too thin by borrowing an amount you’re comfortable repaying.
Loan Repayment Terms
Consider the repayment term. Shorter terms mean higher monthly payments, but less interest paid over the life of the loan. On the other hand, longer terms can make monthly payments more affordable but typically lead to higher overall costs.
Can I Get a Holiday Loan with Bad Credit?
The short answer is, typically yes. Holiday loans are typically accessible to even those with bad credit. You’ll just need to know where to look and how to apply.
How to Get a Holiday Loan with Bad Credit
Are you in search of holiday loans for bad credit? While it may require a little more work on your end, securing a holiday loan when you have bad credit this season may still be possible! Consider following these tips if you’re looking for holiday loans with bad credit:
Understand Your Credit Situation
Before exploring loan options, it’s helpful to understand where your credit stands. Start by checking your credit score through a free credit monitoring service. Knowing your score can help you figure out the types of loans you’re likely to qualify for. It can also better prepare you for what interest rates you’re likely to get.
Consider a Loan from an Online Lender like Cash Factory USA
If you have less than stellar credit, Cash Factory USA might be an option for you. Online lenders, such as Cash Factory USA, often have more flexible requirements and are more open to working with people who have bad credit than traditional banks. Many online lenders focus on income and the ability to repay rather than just credit score. So, if you have a steady income, you may still qualify. We have worked with many customers that have had credit issues in the past. Complete our simple online application here and we can let you know if you’re approved for a loan. If approved, funds can typically be dispersed into your account as soon as the next business day.
Look for Holiday-Specific Loan Offers
During the holiday season, some lenders may offer holiday-specific loan options. These are often short-term personal loans with slightly lower interest rates or more relaxed credit requirements. Some holiday promotions might include deferred payments or a lower introductory rate, so keep an eye out for these!
Consider a Secured Loan
If an unsecured loan is out of reach, a secured loan might be a good alternative. Secured loans require collateral, such as a car title or savings account. This lowers the lender’s risk and may increase your chances of approval. However, make sure you’re comfortable with the terms. If you don’t repay a secured loan, you could lose your collateral.
Explore “Buy Now, Pay Later” Financing
Many retailers now offer financing options directly through “buy now, pay later” services, also known as payment plans. These options allow you to make a series of smaller payments instead of paying the full amount upfront. While this isn’t a traditional loan, it can be an alternative way to manage holiday expenses without having to go through the loan approval process.
Popular “Buy Now, Pay Later” Services:
- Afterpay
- Klarna©
- Affirm©
These services may perform a soft credit check, making them a popular option for those with bad credit. However, it’s still important to review the terms to make sure you can handle the payments.
Tips for Using Holiday Loans Responsibly This Holiday Season
If you decide a holiday loan is right for you, here are some tips to help you use it wisely:
Create a Budget
Figure out how much you plan to spend on holiday-related expenses and stick to it. Use the loan amount to cover specific costs and avoid borrowing more than you need. If you need help getting started on your budget, check out our guide for how to budget here.
Have a Repayment Plan for Your Holiday Loan
Factor in your monthly loan payments into your budget and make sure you can comfortably cover them. Setting up automatic payments can help ensure you never miss a due date.
Compare Holiday Loans Between Lenders
Shop around for the best interest rates and terms. Don’t settle for the first offer you receive. Taking the time to compare options can save you money.
What Happens if I Can’t Repay a Holiday Loan?
Making your payments on time is very important. Missing payments could impact your creditworthiness and increase the amount of interest you pay. It’s important to communicate with your lender to discuss payment options if you need additional assistance.
Apply for Holiday Loans this Season
A loan can be helpful when it comes to managing holiday spending and expenses, as long as it’s used thoughtfully and responsibly. By understanding your financial needs, comparing options, and planning ahead, you can make the most of your loan and enjoy a stress-free holiday season.
If you’re considering a loan this holiday, Cash Factory USA is here to help you find a solution that fits your needs. Click here to find an installment loan in your state to help get you through the holidays.
High-interest loans can be expensive and should be used only for short-term financial needs, not long-term solutions. Customers with credit difficulties should seek credit counseling. The opinions expressed above are solely the author’s views and may or may not reflect the opinions and beliefs of the website or its affiliates. Cash Factory USA does not provide financial advice.
* This blog contains links to other third-party websites that are not endorsed by, directly affiliated with, or sponsored by Cash Factory USA. Such links are only for the convenience of the reader, user, or browser.