Christmas Loans: How Do They Work?

Borrowing Money at Christmas

From Christmas parties to special presents under the tree, a Christmas loan could ease a lot of financial pressure.

Each year, many people stress out about overspending for Christmas but with the help of a Christmas loan, this year could be different.

If you haven’t saved — or haven’t been able to save — for the holiday spending you want to do. Why not consider taking out a Christmas loan?

Here are some important things to consider beforehand.

Christmas Loans or Personal Loans?

As you explore your Christmas options, you may come across lenders specifically advertising “Christmas loans”. What they’re offering is a personal loan designed for people who need (or just want) some extra money.

Just like other types of personal loans, a Christmas 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.

What to Consider Before Getting a Christmas Loan

If you’re set on borrowing for the holidays, here are a few things to consider.

  • Monthly payments and a fixed timeline — Christmas loans are instalment loans. That means they’ll have monthly payments due over a specific amount of time — making it easier to plan into your budget.
  • Interest rates — Depending on loan terms and how your credit looks, personal loans tend to have lower interest rates than credit card interest rates. So taking out a personal loan may save you interest as opposed to charging all of your holiday purchases.
  • Fast funding if approved — If you choose an online lender, generally the application and funding process is quick and easy.

Applying For a Christmas Loan

If you do decide to go down the route of applying for a loan. Make sure you compare your options to get the right loan for your circumstances at the best rate possible. Here are some frequently asked questions:

Can I get a loan if I’m unemployed and have bad credit?

Some lenders consider unemployed applicants, receiving benefits or have a poor credit history. However, if you fill out an application, you could get rejected but there are plenty of ways to improve your credit score if so.

Am I guaranteed a Christmas Loan?

Every time you apply for a loan, whether it’s for Christmas or not, you will be subject to a variety of checks. This will involve identity and credit checks. The final decision on whether you are approved for a loan lies solely with the lender and is not guaranteed.


While a Christmas loan may allow you to spoil your family, remember you do have other options, such as budgeting and setting money aside for Christmas expenses if you can.

But if you decide to take out a Christmas loan, make sure you understand all the costs involved and create a solid plan for how you’ll repay the debt.

Apply Now!