Basics of Holiday Loans

The holidays can be a pretty expensive season. The holidays begin with the costume parties on Halloween, then the lavish feasts on Thanksgiving, the gift-giving on Christmas and finally the parties and merry-making on New Year's Eve. If you are not careful, this marathon of spending can leave you financially drained.

Spending for these holidays has become part of tradition. No one really complains about the extra expenses on food and gifts because you have to admit, we do enjoy everything about the holidays, including the shopping. However, with all this spending, you can't avoid being short on funds occasionally.

For the average income-earners, it doesn't seem to matter how much they save throughout the year. When November comes, they usually realize that they still do not have as much money as they would want to spend on the holidays. Lending companies know this very well, which is why they have a variety of holiday loan offers that you can avail of should you lack the necessary funds for the holidays.

It is easy to surmise just from its name that a holiday loan is an amount of money that a person can borrow for the purpose of holiday spending. There are quite a few differences between holiday loans and other types of loans, including the following:

  • Holiday loans are unsecured and short-term, compared to most regular loans.
  • Holiday loans may only be availed of toward the end of the year, usually starting in the first week of November.
  • Holiday loans are not offered by all lending companies but you can usually get them from companies that also offer payday loans.
  • Holiday loans are normally payable in 12 monthly installments.

Guidelines for Holiday Loan Applications

It is very easy to apply for holiday loans but there are still some guidelines that you have to keep in mind. One of the most important is to pay attention to the annual percentage rate. The general rule of thumb is to make a comparison between the holiday loan's APR to that of your credit card's. A good holiday loan should have a considerably lower APR. If all the holiday loans you find have higher interest rates, then you might actually be better off using your credit card for your holiday purchases.

Do not be tempted to apply for a loan with a high interest rate just because you are desperate to get the money. Take the time to shop around for a good deal before making any commitments. Some holiday loans may seem very attractive when you first look at them, but they may actually come with hidden fees that an unscrupulous lender will purposely fail to reveal. Each lending company includes various benefits to the holiday loans they are offering. In order to find the best deal, you should do a side by side comparison among all the available loans that you can find.

In addition to the interest rates and terms of payment, you would also have to consider the length of time that it takes for your holiday loan to be approved. Some companies approve loans after just a couple of days while others may take weeks due to a lot of paperwork and additional requirements. In order to enjoy the holidays as much as possible, you should do everything you can to find the best holidays loans that can help you with your holiday spending.

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