If you enter “Christmas Loans” into most search engines, you will get a long list of lenders offering extra cash for the holidays. Many of these sites have holiday-themed pictures on their homepages and tout their loans as a great way to get extra cash for the holidays. Most are simply payday loan companies disguising their high-interest loans as something different. Don’t take the bait!
The stress of repaying costly payday loans is the last thing you need during the holidays. They generally come with very high interest rates, sometimes higher than 100% APR! They may also contain hidden fees and don’t disclose their rates and terms until after you apply for one. Often, they claim that you can get approved and have your money within 24 hours and that you can qualify even if you have bad credit. Simply put, these loans can easily get those who are in a desperate situation into even more debt. They are extremely difficult and expensive to repay and can lead to a vicious cycle of debt that is extremely difficult to break.
The best solution is to save money throughout the year for the holidays. Make sure to save for travel, food and gifts. If you’ve neglected to do this, try your best not to borrow money. Your credit rating does NOT take a break for the holidays. Also, your friends and family would probably rather see you in a good financial situation than see you go into debt in order to please them. If you need help budgeting, try Clearpoint’s holiday planner.