Holiday Loans: What They Are and How to Get One

Melinda Sineriz
Nov 12, 2021

No matter what holiday you celebrate, the memories you create with your family is of course the most important part. But many late fall and winter holidays are centered around gift giving as a core part of the fun. The problem is, life happens regardless of the time of year, and many of us find it difficult to afford our holiday cheer on top of things like bills. Enter holiday loans.

Holiday loans can help you keep up with the expenses that come with holidays like Christmas, Hanukkah, Kwanzaa, or Eid al-Fitr. Gifts and travel to be with family can all add up, and if you’ve had other unexpected expenses, finding the funds can be challenging.

Learn more about these loans and where to get them. (If you're looking for information about travel loans, see our article on vacation loans.)

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What is a Holiday Loan?

A holiday loan is a loan you use to cover holiday expenses. Here are a few types of loans that can meet your holiday needs. 

  • Buy now, pay later loans: These loans are usually offered through a partnership with a retailer and allow you to split purchases into installments rather than paying all at once. If you’ve purchased anything online lately, you’ve likely seen an offer from Klarna, Affirm or a similar company to pay in installments. 
  • Personal loans: These are loans that you can use for any purpose. You can get a personal loan from a bank, credit union or another financial institution. Unsecured personal loans don’t require collateral, which is property that the lender can seize if you stop making payments. Secured loans do require collateral, which can be a savings account or CD or property like a car
  • Installment loans: With this loan, you borrow a lump sum loan amount and repay it with a fixed number of payments over time. Car loans and home equity loans are examples of installment loans. Installments can be weekly, biweekly or monthly. These loans can be secured or unsecured.  
  • Layaway: This is a program offered by some retailers that allow you to make ongoing payments toward an item you’ve set aside. When you pay for it in full, you can take the item home. This option used to be more popular, but credit cards and buy now, pay later loans have made them almost nonexistent. 

How Do I Get a Holiday Loan?

You can get buy now, pay later loans for the holiday season from many online retailers. Some buy now, pay later loan providers also have apps that allow you to shop in-store and make installment payments on your purchase. Some buy now, pay later providers check your credit, so you may not qualify if you’re looking for a holiday loan for bad credit.  

For personal or installment loans, you’ll need to complete a loan application with a bank or federal credit union. They will check your credit, and you’ll likely need good-to-excellent credit to qualify. You’ll also need your identification, and you’ll need to provide personal information like your date of birth, citizenship status, sources of income, and the amount of income you receive each month. 

If you're looking for a holiday loan you can use for anything, from decorations to your holiday dinner to presents, an installment loan with Possible or another lender may be just the right fit for your budget and needs. They're also the most convenient if you have bad or no credit, and want to buy items from more than one retailer. (Or give cash as a gift!)

If you’re approved, the lender will have you sign one or more documents that explain the loan terms. Review the document carefully and confirm the interest rate, the origination fee, whether it's a variable or fixed rate, the repayment schedule, and whether there are late payment or pre-payment penalties. 

Are There Holiday Loans for Bad Credit?

Yes, you can find a holiday loan for bad credit. If you have fair or even poor credit, you may still be able to find a personal loan. You could also qualify for a payday loan, as they typically don’t check your credit. Be cautious with these options, however, as both can have high interest rates and hidden fees. There are predatory lenders out there, and they often prey on folks who have poor credit. 

These products can also lead to a debt spiral, where you’re finding yourself in more and more debt and having an increasingly difficult time keeping up. 

A better option may be to look at your budget and plan your holiday spending within that budget. Consider gifting low-cost experiences or your time rather than big-ticket items. Time spent together learning how to craft, volunteering or making holiday cookies can be as meaningful, or more so, than buying a trendy item. 

Another option is an installment loan from Possible Finance. We offer loans of up to $500*, and don’t use your credit score to decide whether you qualify. You pay off the loan in installments over a couple of months, and you can reschedule payments for up to 29 days later using our app.

You can apply right from your phone, and the funds are sent directly to your bank account. If you want cash now and to pay later, with Possible, you're only an ATM away from getting cash in hand.

Are Online Holiday Loans an Option?

You can find an online holiday loan, and it’s easier than you might think. Some lenders, including banks and credit unions that provide online banking, offer short-term loans that may be a good fit for your holiday needs. Those lenders may allow you to pay off your personal loan with monthly payments over the course of 1-6 months.

Payday loans are another online holiday loan option, but it’s important to be cautious with this option. These loans are typically for $500 or less, and you must pay them back on your next payday, along with a significant amount of interest. (This option can have an annual percentage rate, or APR, of 400% and above.)

Payday loans are a popular option because lenders don’t typically check your credit. Some payday lenders will allow you to roll over the loan for a fee, while other online lenders will do this automatically, adding to the cost of the loan. If you do take out a holiday payday loan, be sure to review the terms and disclosures carefully and be confident that you can pay it off as soon as possible. 

Buy Now Pay Later is also an option for a type of online holiday loan, but those are usually restricted to one retailer and can have hidden fees or restrictions for how much you can borrow and what the repayment terms are. They're more a line of credit than anything else, and that shuts out many lower-income individuals that may not have built up a strong credit score yet.

Whatever online holiday loan option you may choose, it's important to ask yourself the important questions:

  1. Can I pay this back within the loan term?
  2. How much am I paying for this loan? (Fees, interest and other charges.)
  3. Do the monthly payments easily fit into my budget for the next few months/next month/next payday?

Funding the Holidays

Finding the funds for holiday gifts and decorations can be stressful. Keep in mind that holidays are about more than gifts and spending, however. They’re about spending time with family and friends and reflecting on what’s truly important to us. Spending time with your loved ones is often the best gift of all—for them and for you. 

An installment loan from Possible Finance is a great way to get cash for the holidays without worrying about your creditworthiness. We spread the payments out and offer reasonable rates and terms. Whatever holiday loan option you choose, or if you decide you don't need one after all, we hope you make it an enjoyable holiday to remember.

Melinda Sineriz

Melinda Sineriz is a financial writer and editor who resides in Toledo, Ohio. She has a bachelor's degree in English from Miami University in Oxford, Ohio. She also has a Master of the Arts in Teaching from Bard College. Melinda has been writing about personal finance for over a decade, with a full-time focus over the past few years. She also worked in insurance for five years, including as a licensed life and health insurance agent. She specializes in writing about mortgages. student loans, personal loans, insurance, managing credit and debt, and credit cards. She enjoys helping people make informed financial decisions. When she's not working, she's reading, avoiding writing a novel, or spending time with her dogs and cats.

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