If you’re considering taking out a loan to help with the cost of Christmas this year, then you’re not alone. In fact, millions of Brits each year borrow money to help them afford the cost of the festive season, whether it’s buying gifts for the family, being able to afford a bigger grocery shop, decorating the home or getting away for the holidays. If you’re unable to financially support yourself through the festive period in any other way, then taking out a loan can be a great option for getting the extra cash that you need. However, there are some important things to consider before you
borrow any money for the festivities.
Here are our top tips to help make sure it works for you.
Tip #1. Set a Budget:
Before you jump into taking out a loan to cover you for Christmas, it’s a good idea to set a firm budget and decide how much you are going to spend overall. By doing this, you’ll be able to determine how much you’ll need to borrow to ensure that it’s affordable for you. If possible, you should try and use any spare money that you have or savings first, since this will work out cheaper for you in the long run.
Tip #2. Plan for Repayments:
Bear in mind that when you borrow money to cover the cost of Christmas, you’ll eventually need to pay it back. If you’re taking out a payday loan or short-term loans, both very popular options over the festive period, then bear in mind that you’ll probably need to start making repayments straight away in January. Before you sign any agreements, make sure that you’re aware of when repayments are expected, and understand your options when it comes to repaying – for example, will you need to pay the loan back all in one go, or can you split it over several months? Make sure that you choose an option that is affordable for you to avoid future financial difficulties.
Tip #3. Don’t Forget About Interest:
When taking out a loan for Christmas, keep in mind that you’ll need to pay back more than you borrowed as interest will be added on. This is especially true for short term loans that are repaid in one go; you’ll see the increase straight away. Lenders such as Cash Lady are usually very upfront about interest rates and you will usually be able to see how much interest you’ll pay before you borrow, so you can ensure it will be affordable for you.
Tip #4. Consider
Lastly, you might want to consider some alternatives to taking out a loan, to ensure that it is the right option for you. For example, opening a credit card can be a good option since it will allow you to spread the cost over time and you’ll be able to keep the card to use it again next year. Or, you could buy gifts on hire purchase to spread the cost.
If these tips helped you, we’d love to hear your feedback!