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What Are Holiday Loans?

The winter holiday season is mostly associated with the fun and joy of shopping and vacationing with family and friends. However, money can often dwindle to new lows whilst there are still quite a few things that you still need to buy. Holiday loans can be very helpful in such situations and can help keep the balance between your savings and the shopping list. A holiday loan can be used to pay for varied things such as gifts, travel, etc.

Holiday loans can be described as personal loans which are offered by banks, credit unions, and other financial institutions. It may be noted that holiday loans are not cash advance loans, payday loans, or other emergency loans. It is also important to note that payday loans and similar short-term instant loans come with a very high rate of interest and other fees. Personal loans, on the other hand, like holiday loans come with a lower interest rate; it is thus more affordable. Hence, borrowers need to verify that the holiday loans are personal loans and not short-term emergency loans when they are looking for holiday loans over the internet.

winter holiday

Reasons for availing of holiday loans

The holiday season at the end of the year is often fun-filled and enjoyable. It also however coincided with increased financial stress, particularly on people who have not budgeted for the occasion. The holiday season corresponds to increased shopping, buying gifts for loved ones, and preparation of special dishes, etc. There are also extra and unforeseen expenditures during this time of the year which can pose excess stress on the bank balance.

Most of us end up stretching our bank accounts to their limits during the holiday season. Some of us even end up taking on excessive debt which has to be taken care of after the holiday season has ended. Even though it is recommended that all of us save for the holiday season and avoid the desire to overspend during the holidays, it is but a foregone conclusion that most of us nearly find it unfeasible to have a joyous time at the end of the year without some extra funds.

Holiday loans can assist us in fully indulging ourselves in the festive mood and other celebrations that happen concurrently with the holiday season. Holiday loans can help you purchase that elusive and expensive toy that your child desires or book a flight home to meet your loved ones whom you are missing, without creating a big dent in your finances. Despite having enough savings, a holiday loan can help you have the luxury of extra cash which can be repaid over some months at an affordable interest rate. By the time, you start repaying the holiday loan, the expenses would have returned to normalcy allowing you access to additional funds which can be used to repay the holiday loan.

As compared to credit cards, holiday loans are better because the latter does not have to be fully repaid the next month. Also, the interest rates for holiday loans tend to be lower than those levied by credit card companies.

See also: How to get holiday loans with no credit check?

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He worked as an attorney practicing insurance defense and commercial litigation. He covers lenders, bank accounts, mortgage rates, refinance rates, and borrowing and savings tips. You can reach Chris Miller at chris.miller@siloans.com.