The holidays are stressful times. As Christmas music blasts on the stereo, relatives wrapping expensive gifts can often pressure you to splurge a bit - because who wants to be the relative that gifts socks every holiday?
If you’re running low on funds this year but want to show your friends and family how much you love them, a Christmas loan will probably be your best bet.
How Do Christmas Loans Work?
Christmas loans are great options to meet urgent needs and expenses around the holiday. As soon as the next business day, borrowers could be buying gifts for their loved ones.
Repaying the loan is made simple as Christmas loans come either as a payday loan or personal loan - with an array of terms that could match a variety of your needs.
Types of Christmas Loans For Bad Credit
Here’s a detailed breakdown of the two types of Christmas loans you could apply for with the help of CocoLoan.
Payday loans are short-term loans that you could usually borrow without a high credit score.
On CocoLoan, payday loans are normally available for amounts ranging from $100 to $5000 and are expected to be repaid during your next payday or within the next 2 to 4 weeks.
If you find the borrowing amount for payday loans to be lacking, you may opt for a personal loan. A personal loan allows you to borrow higher amounts of up to $35,000 with a longer repayment term, often up to 60 months.
Thus, a Christmas loan creates less personal stress due to the lower amount of your monthly payment, and it’s bad credit friendly!
Fast and Easy Loans You'll NeedApply Now
How Much Can I Borrow With Christmas Loans?
Depending on the holiday loan type you apply and qualify for, you could borrow any number ranging from $100 to $35,000. Payday loans are great for smaller holiday purchases and gifts, as borrowers are often limited to a $1000 loan. If you’re looking to splurge on your friends and family, you may opt for a personal loan that could go for as much as $35,000.
However, the exact borrowing limit will depend on your lender, income, credit score, and the loan terms you choose.
How much would you like to borrow?
What’s Good About Unsecured Holiday Loans?
While holiday loans may not be for everyone, there are existing features that have proven beneficial to borrowers.
Capital For Holiday Expenditures
The most tempting benefit, for example, is that it provides an immediate influx of fixed capital for holiday expenditures. It’s a great option if you need instant money during the holiday season.
Lower Interest Rates
Holiday loans are known to have lower interest rates compared to credit cards. A report by the Federal Reserve revealed that the average loan interest rate stands at around 9.58%, while the average credit card interest rate remains at 16.30%.
Because holiday loans have a set repayment period, you know exactly when your debt will be fully-paid and how you can budget around it.
Improve Credit Score
Not to mention that the borrowed funds are often payable within 60 months, these short-term loans become great methods to improve your credit score potentially. The low-interest rates and short-term liability are the perfect combinations to show the bank that you’re a trustworthy client.
No Collateral Required
Unsecured holiday loans don’t require collateral, which is often seen as an advantage. While unsecured loans may bring in higher interest rates compared to their asset-backed counterpart, for individuals who don’t want to risk any of their assets to raise funds, a higher interest rate is a more favorable condition.
Does Bad Credit Matter? Am I Eligible For A Holiday Loan?
The good news is that you can still qualify for a holiday loan even with bad credit. However, some lenders may hold it against you and offer terms at extremely high APRs. When you have bad credit, lenders will give you loan terms with high APRs to make the stress worthwhile for them.
When you have bad credit, you might benefit better from payday loans - as these loans don’t pay much attention to your credit score. They may offer lower borrowing limits, but that’s a much better tradeoff than having to pay off loans with at least 100% APR.
Other than credit score, here are some other basic criteria that one would have to meet to apply:
- Be at least 18 years old;
- Show a valid resident identification card;
- Provide proof of income;
- Validate your bank account;
- Show a permanent address;
- Specify email and other contact information
How To Apply For Bad Credit Holiday Loans?
Physically visiting lenders is tiring. An online search may prove fruitful given that you’re able to compare different lenders.
Online portals allow potential borrowers to find lenders through 4 easy steps right here with CocoLoan:
- Fill Out The Form: You may opt to submit your information through our online portals on our website. Make sure to fill these out with the correct personal and financial information so as to speed up the application process.
- Get Quotes From Lenders: CocoLoan has a wide and diverse array of partnered lenders that you may choose from. Choose a lender and get in touch to see if you can come to an agreement.
- Sign The Agreement: Happy with the terms and conditions? Sign the agreement with the lender.
- Receive The Money: Depending on the lender, you may receive your funds straight to your bank account as soon as the next business day.
How Does CocoLoan Compare
|Why Trust CocoLoan?|
|How much can you get?||$50 to $35,000||Zero upfront charges|
|What are the loan terms?||1 - 36 months||Easy repayment|
|Are credit checks needed?||Yes||Mostly soft pulls|
|Are bad credit accepted?||Yes||All credit considered|
|How to apply?||Totally online||Simple and straightforward|
Other Ways To Cover Holiday Expenses
Besides taking on holiday loans from a direct lender, you may also opt for the following alternatives.
Personal Loans From Traditional Financial Institutions
If you don’t want to deal with direct lenders, you may instead opt for personal holiday loans from banks and credit unions that allow you to borrow money at lower interest rates.
However, institutional lenders will require you to have at least a good credit score to offer competitive rates. More documents, such as a valid ID and proof of income, are required even for small loans. This makes it less of a viable option in case you need the money urgently.
When you can’t find third-party lenders, you may want to consider borrowing from your family members or friends to avoid high interest rates or unfair loan agreements. Nevertheless, it may feel embarrassing to ask for money from your family to buy them gifts for Christmas.
A credit card is another option worth considering as it provides special financing options for holiday expenses. Some credit cards offer 0% APR for purchases during the first 12 to 21 months after application. Having a credit card is also an excellent way to start building a positive credit score if you can pay it off on time every month.
Unfortunately, the credit card application takes at least a week to be approved. With the holidays right around the corner, you may want to look for other options.