Christmas is almost here and if you’re worried about all those Christmas gifts that you have to buy, the new dress that you need to get, and every other associated expense – how feasible would be a festive loan? Let’s dig deeper to find out.
It is the best time of the year to catch up with your near and dear ones. Well, we do miss that tinkling of wine glasses, spending time with our family by cosying up near the fireplace while being nostalgic, that aroma of freshly-baked cookies, and yes, who can ever say no to that roasted turkey? If you’re not prepared financially for all these – then a personal loan for Christmas may help you. Although, starting a new year with debt is not a very good idea. However, if you do not have sufficient amount of money for all the festivities and celebrations, a loan may be beneficial for you. Most of the people plan way ahead of time and keep aside a portion of their monthly income for the festivities. Planning and budgeting are essential financial methods that you should consider while making your financial resolution at the beginning of every year.
Why should you Borrow a Loan for Christmas?
Borrowing a loan will help you manage the expenses of the festival. You can buy a gift and presents for all your loved ones. In addition to that, you can also plan and take that most awaited dream trip with your family. Who doesn’t love surprises? There are a few lenders who offer personal loans from £1,000 to £35,000 for a period of 1 to 7 years. That means you can easily spread the cost of the repayments over several years. It will not be a burden on you to make the repayments when within a month or so like a credit card. This is the reason most of the people opt for a personal loan over a credit card.
If you have an emergency fund and you are thinking not to disturb it, then you may also use that money instead of taking out a loan. You haven’t saved up for Christmas and now it’s knocking on the door – this is an emergency. Rather than borrowing a loan, you should use the money that is in your emergency fund.
When should you Borrow a Loan?
Always remember, a loan is not free money. You are legally and morally liable for the repayment of the amount that you’ve borrowed from a lender, Credit Card Company, bank, or any other financial source. Borrow an amount that you can afford to repay because if you fail to make the repayments on time or you miss making a repayment – your credit score will be ruined. Your credit score reflects how well you are doing on the financial front of your life and messing it up will definitely create a stumbling block on your path in the future.
How should you Borrow a Loan?
Whether it’s a Home Improvement Loan or a Christmas Loan, you should always compare the loans before making any final decision. Comparing different loan offers from various lenders will help you choose the one with lower APR. Do not settle down for the first offer that you receive because you may miss out the other offers if you do so.
Here’s a checklist that you should look at before borrowing a loan:
- FCA Registered: The Financial Conduct Authority (FCA) is the regulator and watchdog of the UK financial services sector. Every lender and broker in the market have to be registered by them. If you receive an offer from a firm that is not yet registered by the FCA, it is wise not to deal with them as it may be a sign of a probable scam. Check the registration number and all other details of the firm on the Financial Services Register to know their authenticity.
- Repayment Plan: Before you sign on the dotted line, make sure you have a strong and practical repayment plan. Every lender has their lending criteria according to which they decide which individual to lend to. Lending criteria varies from lender to lender. Draft a repayment plan after deducting your essential expenses from your monthly income to gauge for loan affordability.
- Terms & Conditions: Go through the Terms & Conditions that the lender offers you thoroughly. If you have issues or concerns with any of them, contact your lender immediately and discuss it with them. Do not enter into a legal deal before knowing what you’re getting into. Also, read the fine print – if you don’t, you may miss the vital information.
You do not always need a lot of money to celebrate on occasions. The love and bond that is shared between you and your loved ones must be cherished. And Christmas offers you a time where you can meet all your loved ones because of the holidays. Spending time and creating memories is all that every one of us looks forward to every year on Christmas. A loan can help you out to ease the financial strain, but you must handle it carefully. A little mismanagement may lead you to a debt trap and also hurt your credit score extensively. Calculate the amount that you need to borrow for the grand celebration, and search for lenders or brokers accordingly. There are a lot of websites that allow you to compare loans for absolutely free, like LoanTube. Visit the website, fill in the application form and see what the lenders have to offer you. The lenders associated with LoanTube perform soft credit check that doesn’t harm your score at all. However, a hard check is also conducted by them before giving their final decision.
Choose to spend wisely this Christmas so that you don’t start the New Year by being broke. Prepare a financial calendar and stick to it throughout the year for a financially stable journey.