In 2022, 35% of Americans took on more than $1,500 worth of additional debt during the holiday season, according to a LendingTree study. And if you want to bridge the gap between your gift list and your bank account, you may be looking for a way to finance your purchases.
Holiday loans are personal loans that you can use to cover holiday-related expenses. These loans come with fixed APRs (annual percentage rates) and fixed monthly payments over a predetermined period of time, commonly 12 to 60 months.
Holiday loans are typically unsecured loans, meaning they won’t require collateral. Because of this, lenders rely heavily on factors like your credit score, income, payment history and debt-to-income (DTI) ratio to determine your personal loan eligibility.
A holiday loan isn’t a good fit for everyone and there can be risks to personal loans. However, if you have a good credit score and have sufficient income to repay the loan, a holiday loan can be a good solution for those who can’t afford the purchases upfront and want to build credit. Be sure to shop around and compare rates, fees, amounts and terms to get a holiday loan that best fits your circumstances.
Yes — getting a holiday loan with bad credit is possible, though it may be challenging to qualify with some lenders. Other lenders are willing to work with poor-credit borrowers, though you may get stuck with higher interest rates.
Before applying for a loan, consider improving your credit score so you can boost your creditworthiness in the eyes of lenders.
It can be hard to get a holiday loan if you don’t have good credit or much experience with debt. However, personal loan requirements vary from lender to lender and some companies are willing to work with bad-credit borrowers or consumers who are new to credit.