Christmas Loans

Christmas is a joyful time of the year and an exceptional day, and nothing can be more devastating during that time than being unable to gift your loved ones with all the presents they’ve been waiting for. In cases like this, sometimes people opt for holiday loans for bad credit.

However, with a Christmas loan or travel loans, you’ll be able to cover all the expenses of the holidays without worrying about the decorations, presents, food, or any unexpected expenses.

What’s a Christmas Loan?

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A Christmas loan is no different than a personal one except in the aspect that it’s explicitly borrowed to cover holiday expenses.

Typically, these are represented in the traditional festive food, the gifts and presents, and regular expenses that usually increase around that time due to the more frequent visits or hangouts.

Most commonly, a Christmas loan for unemployed is not a secured one, which means that the borrower isn’t required to provide collateral but will get an amount of money that is proportionate with their credit score and their credit history.

After putting it to the test, this is because an unsecured equipment loan bad credit is a lot riskier for the lender; with no guarantee that they’ll get their money back, they need to have a backup plan, and that’s why they come at a much higher interest rate than regular loans.

While you can take a loan for home improvment for Christmas from the bank or a credit union, you can benefit from the more flexible terms that the online lenders who specialise in these types of loans have to offer.

What Factors to Keep in Mind When Considering Christmas Loans?

When you’re scanning through various Christmas loan options, here are the most important factors that you should pay attention to:

Soft Credit Inquiries

christmas loan

Does the lender you’re considering conduct a soft credit inquiry? These are called prequalifications, and they help the lenders decide whether or not you’re a good candidate for the loan.

By submitting several of those, you can shortlist the lenders in order to pick the ideal one.

Payment Timeline

Drawing from our experience, it’s important that you understand the repayment agreement, including the amount of money you’ll have to pay each month, the amount of time the term will span, and whether the interest rate is fixed or variable.

All these factors will help you budget your finances with the repayment instalments in consideration, making the navigation of the situation a lot easier for you.

Interest Rate

We all know how high interest rates can get with credit cards, which is why a Christmas loan is a much better choice if you pick one with a reasonable funeral loans term and if you have a solid credit score that doesn’t dictate imposing unreasonably high interest.

However, this factor is a bit tricky, as a borrower with a subpar credit score might suffer more damage than benefit from the advantage of a Christmas loan, especially with longer loan terms, which have higher interest rates.

Speed of Access

As indicated by our tests, if your Christmas loan money won’t be transferred to your account in time for the holidays, it might defy the point of taking the loan out. This is another reason that a specialised lender (online or offline) can be a lot more helpful as they provide faster funding than, say, banks or credit unions.

Christmas Loan Cons

christmas loan no credit check

Although, on paper, Christmas loans or types of mortgage loans in Australia sound like an ideal solution to your shortage of funds, there are some serious consequences that you can’t overlook, including:

  • Fees: Like any type of consumer loans, there are some associated fees when it comes to taking out a Christmas loan, including origination fees (to process the loan), late fees (in the case that you don’t meet due dates), and prepayment fees (in the case that you pay off the loan earlier than expected). Make sure that you study these fees well and factor them in when you’re calculating the actual cost of your Christmas loan.
  • Effect on Credit: In the case of defaulting (being unable to pay the loan back) or paying the monthly instalment later than the due date, your credit score will suffer a negative impact, which will make it a lot harder to borrow in the future, or will make the interest rates skyrocket beyond reason.
  • Uncertainty: There’s always a certain risk of finances deteriorating when taking out a loan, but it’s always about weighing the risk against the benefit. If you default because the repayment term was too short or because the interest rates were too high, you might bear the brunt of debilitating debt.

What Are Some Good Lenders to Take Christmas Loans From?


You can get a $5,000 computer loan with Upgrade with a 7.98% APR (Annual Percentage Rate), paying $156.64 monthly for a term of 36 months.


If you want a longer term to pay back your $5,000, you can opt for SoFi with their 60-month term, 13.34% APR, and $114.64 monthly payments.


Marcus is a good backup for SoFi as their monthly payments are slightly higher at $115.03, due to the slightly higher 13.49% interest rate on a vet bill loan.

Is It a Good Idea for You to Get a Christmas Loan?

no credit check christmas loan

The answer to this question is actually divided into three other ones, so, you should ask yourself the following things:

  • Is it cheaper to pay with a credit card? Depending on your credit score, which dictates the level of interest rate imposed on you, it could actually be cheaper to pay for your holiday expenses using your credit card in the long run.
  • Do you need the loan to help you tide over the expenses or to fund your holiday expenses? If it’s the latter, then taking out the loan is actually not the best route. A loan is only a good option if you’re going to use the money to help you with financial struggle and not the lack of financing.
  • Are you certain about how you will pay cosmetic surgery loans no credit check back? If you’re already suffering from the lack of financing, then adding more debt to your cash flow isn’t going to do you any good. Without a solid plan or complete certainty that you’ll be able to pay the monthly instalments in full and on time, then you’ll just be paving the way for credit score damage.

In the case that you anticipate inability to repay or feel like you’re putting your credit score at risk, it’s better to think about alternatives like secured loans where the collateral can be taken away from you in the case of a default or the possibility to take loans from a family member or a close friend.

Final Thoughts

A Christmas loan is a life-saver and a great way to feel merry during the holidays instead of worrying about expenses.

However, you should understand and consider the risks involved with the loan -as the case is with any other loan- before you get involved.

You can do so by considering the interest rate, the term of the loan, the associated fees for taking out the loan, and just how quickly you can get the funds transferred to your account.

About the Author

Lucy has over a decade of experience in finance. She is currently the content curator here at Perfect Payday.

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