Using Personal Loans for Holiday Expenses

With the holidays right around the corner, panic may be setting in for those who haven’t started saving for gifts and other expenses. No worries, a personal loan may be a perfect option for many of us who are late to the game in our quest to save up in advance for holidays. We promise ourselves we’ll do a better job each year, right? January rolls around and those credit card bills roll in. You feel like you’ve been hit by a truck. So, how can we avoid that same scenario from playing out again this year? It’s simple. We can be more pro-active, put those credit cards away, and apply for a personal loan that fits our holiday budget. Personal loans are unsecured lump sum loans for a fixed term and a fixed interest rate. A low-interest personal loan from Spirit Financial Credit Union or another local credit union can make holiday wishes come true while helping you to stay out of credit card debt.

3 Benefits of using a personal loan for holiday shopping 

1.     Personal loans are typically offered at a lower interest rate than credit cards. This can be a big savings as those holiday gifts for friends and family can add up. That low-interest, lump sum loan can help avoid an after-holiday credit card hangover.

2.     Personal loans can help you stick to your holiday budget. With a personal loan, you borrow only what you need in one lump sum. By borrowing only what you need, you will be more apt to stay within your budget. The trick is to commit yourself to avoid using your credit cards. Those of you who have relied heavily on credit cards for your holiday spending in the past, realize it can be very tempting to overspend. Especially if you aren’t keeping a close track of purchases. You can easily lose track of spending when using multiple credit cards and end up blowing your budget before you make a crack in that holiday list. Credit card spending can add up quickly, catching you with an unwelcome and very high balance surprise by the time the new year rolls around.

3.     Paying off a loan is easier for most borrowers. One pre-set monthly payment is easier to deal with than several credit cards payments each month. You will also have a clear end date for repayment. You are required to pay off your personal loan in the agreed upon term, so you make a regular payment each month until the loan is paid off. With credit cards, it may be too enticing to pay only the minimum due each month. This can result in that holiday debt lingering for much longer than you’d like, costing you a lot more in interest in the end. You may even continue charging after the holidays, making it nearly impossible to pay off your holiday debt in a quick and efficient manner.

Be proactive and apply for a personal loan for your holiday cash needs 

Before you begin shopping around for the perfect holiday gifts, you need to shop around for a low-interest personal loan to fit your needs. Advance financial planning can help you enjoy a more stress-free holiday. Personal loans can be used for anything, from holiday travel to entertaining or the all-important gift-buying. Look for a loan for the amount you need and flexible terms that will make for a payment you can afford. Many credit unions, including Spirit Financial Credit Union, provide an easy application process that enables you to apply for personal loans right online.

If you want to avoid draining your savings or get bogged down with high-interest credit card debt, then be practical and start planning for holiday expenses now. Make your list and check it twice. Include all of those holiday expenses you face each year. This will help you determine a budget and the amount of cash you need to accomplish your holiday goals. Then, apply for a low-interest personal loan at your credit union to help you check all of those items off your list. Stick to your budget and enjoy a great holiday season.

Learn more about personal loans and other financial services on our blog.

Greg Quinn