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Are Christmas Loans a Good Way to Pay for Holiday Trip?



Christmas Loans for Holiday Trip

From Christmas parties to special presents under the tree, the holidays can come with a lot of financial pressure.

You’re not alone if the thought of holiday spending makes you feel more anxious than joyful. Nearly 80% of Americans stress out about overspending for Christmas or the holidays, according to a 2018 Credit Karma survey. In 2020, another Credit Karma survey found that over half of Americans felt more financially stressed by this time of year than the year before. And as we near December 2021, more than 30% of people polled in our survey feel financially unprepared for this upcoming holiday season — with the impacts of the coronavirus pandemic a likely factor.

In anticipation of increased holiday spending on items like Christmas presents or fine food for a family dinner, some traditional lenders actively offer loans for the holidays. But it’s crucial to remember that a holiday loan is frequently similar to a type of emergency personal loan, which might have a high-interest rate in the form of high fees and APR.

If you’re considering getting a Christmas money loan because you don’t have the savings you need for the holiday spending or celebrating you want to undertake, here are some of the important costs and risks to consider. We’ve also compiled some options that might help you hit your holiday goals without going the Christmas loan route.

What are Christmas loans?

You can come across lenders offering “Christmas loans” specifically when you look into your holiday possibilities. Actually, what they’re offering is a personal loan intended for those who want (or simply desire) a little additional cash during Christmas or other winter holidays.

Just like other types of personal loans, a Christmas loan or holiday loan can be a secured or unsecured loan. Your terms and eligibility are determined by a variety of factors that vary by lender, including your credit and income. To qualify for the most favorable terms and most competitive interest rates, you need to have good credit.

It can be simpler to qualify for a secured loan, which would need some sort of collateral if you have credit history concerns. Take note though: If you’re unable to repay your secured loan and default, the lender can repossess your collateral as payment.

If you’re looking to up your spending for the holidays, consider the pros and cons of all your options. Taking out a Christmas loan could come with costs that set you back far beyond the new year if you don’t have a solid plan for how you’ll repay the debt — and using a credit card may or may not be a better option.

Buy-now, pay-later apps are a potentially sound alternative like an app for saving money for a trip but also require you to budget ahead to ensure you can handle paying for purchases in a small number of installments.

Creating a realistic holiday budget can be a great way to view your regular expenses and holiday expenses in one place and track your spending. Consider reading our guide for even more tips to help you manage your holiday debt, including creative gift-giving ideas.

How to Borrow Money During a Financial Setback?

When your car breaks down, a family member needs expensive medical care, or someone in your home loses their job, a financial setback can make things much more stressful.

Any amount of money borrowed during such a trying time can be considered a hardship on personal loans. This can involve borrowing money from friends or relatives, taking out a personal loan, or getting equity financing.

Even if there are secure borrowing solutions during difficult times, adding debt may make your situation worse. It is crucial to weigh all of your options before borrowing because of this.

Personal loans

Unsecured personal loans are offered by banks, credit unions, and online lenders to borrowers with all types of credit. Some lenders offer secured personal loans, which require collateral like a vehicle or savings account and can help you qualify for a better rate.

Since some personal loans are designed for borrowers with poor credit (629 or below FICO), having a low credit score may not automatically disqualify you from receiving a personal loan. If you’re borrowing for an emergency, a personal loan can be funded within a couple of days.


Although it would be ideal if lenders offered no-interest or low-interest loans to everybody in need, it isn’t typically how the finance sector operates. Be cautious of products marketed as “hardship personal loans,” since they often come with high costs. It would be great if lenders made no- or low-interest loans to anyone suffering a financial hardship, but that’s generally not how the finance industry works. Be cautious of products marketed as “hardship loans,” since they often come with high costs.

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