There is no denying the fact that the Christmas season can be expensive. A long list of expenses is waiting to burn a big hole in your pocket, from buying presents to visiting your family and friends. This year Christmas is going to be bland for many people because of having their back to the wall. Yet, you cannot leave traditions unfollowed.
After the outbreak of Covid-19, most of the people have been made redundant, and ever since, they have been struggling to land a job. Savings are fading, and people are turning to lenders to make ends meet. During the pandemic, the number of sub-prime borrowers applying for credit cards has raised by 143%, according to Equifax, a credit reference agency.
According to the report, it seems like people with poor financial conditions are being turned down by mainstream lenders and thereby looking to apply for more expensive plastic cards. However, a few people are in the sub-prime category have been able to qualify for short-term loans successfully.
Well, if you need money now, you will either dip into your savings or approach an online lender. Christmas is coming, so you can think of borrowing some money to make the celebration as right as possible.
Now the question is if it is safe to borrow money for celebration expenses.
A good rule of thumb says that you should not take out a loan for non-essential expenses. If you still need to borrow money for some of the Christmas expenses, try to avoid payday loans and credit cards. Guaranteed Christmas loans will be an ideal choice. You do not need to put down collateral, nor do you need to have a hard credit check. Lenders will check your affordability and immediately transfer money to your account. Even though these loans are more affordable than other funding sources, it does not mean you will throw caution to the wind.
Tips when you want to take out a Christmas loan
Ideally, no loan is suitable to fund non-essential expenses, but if you have no other way around, you should bear the following tips in mind to avoid falling into debt.
- Have a Christmas budget
Christmas expenses are not emergency expenses. It means you are well aware of them beforehand. Therefore you should start saving money as early as possible for celebration. To make a smarter move, you should make a list of expenses you often meet during the festive season and then set an estimated spending limit.
This will help you know how much you need to have in your Christmas budget and how long it will take to achieve the goal if you stick to your plan. Use those savings to meet your festive expense, and if that falls short, you can take out Christmas loans. So now you must have understood that the availability of Christmas loans does not deter you from making a budget.
You will get into a big problem if you rely on a loan to fund significant expenses for Christmas. First off, a lender may hesitate to sign off on, and secondly, if they approve, you will likely face difficulty paying down a hefty amount even if you are to pay off in fixed installments.
- Let your budget decide your celebration level.
During the festive season, you may be tempted to keep all traditional alive, but do not forget your financial condition. The pandemic is still on, and unemployment will continue to hit the economy. If you stay focused on your present only and do not plan about your future, you will end up with a big problem.
No matter how much money you want to spend on your Christmas celebration, make sure that your budget allows for it. If you have not saved much money, you should keep yourself from spending prodigally on Christmas.
To cut a long story short, you should spend money on celebrations based on your budget. Even if you are taking out a loan to meet some of your expenses, make sure that you will not face any problem to repay the loan later.
- Avoid traps
If you are taking out a Christmas loan, make sure that you choose a reliable lender. A few lenders offer payday loans in the form of Christmas loans. Avoid those Christmas loans that require you to pay off the whole of money in a lump sum.
Reputed and trustworthy online lenders will allow you to pay off these loans in fixed monthly instalments. Borrowing money for Christmas shopping is not a bad idea as long as you are not funding big expenditure and you have the potential to repay the loan on time. It is always a good idea to avoid taking out a loan if you are skeptical about your repayment.