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Late and missed payments, along with other external factors, can have a negative effect on your credit score.
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Membership fee
2 loans per year
Repay each loan in
Representative APR
Waiting period
Late and missed payments, along with other external factors, can have a negative effect on your credit score.
As the holiday season is approaching, it isn't too surprising that many of us are starting to worry about paying for all the gifts, food, and festive cheer. It's no wonder then that Christmas loans are such a popular option.
Some lenders market loans designed explicitly for festive spending, but in most cases, Christmas loans are just like any other short-term personal loan, and this means they could come with a high price tag attached.
If you haven’t had sufficient money to save up for your holiday spending and need to find funds to cover your expenses this Christmas, here are some things to bear in mind when weighing up if a Christmas loan is right for you.
Although some lenders send out marketing materials advertising Christmas loans once Autumn comes around, in fact, these loans are just another way of titling a short-term personal loan.
Essentially, a Christmas loan is a personal loan taken out over the holiday season to provide sufficient funds to purchase gifts, decorations, and food for the festive celebrations.
Like any other personal loan, Christmas loans can either be unsecured or secured loans, with your eligibility and terms being determined by several factors which vary depending on the lender, the product you've applied for, your income and your credit rating.
To be eligible for the most favourable interest rates and terms, you'll need to have a good credit score.
If your credit rating isn't the best, you may find it simpler to be approved for a secured loan with your car or home as collateral. It's important to note that if you choose this option, you could lose your home or vehicle if you then go on to default on your payments.
Not everybody takes out a loan to cover their Christmas expenditure. Many people try to save over the year so that they have enough put away to pay for their celebration.
Others don't see gifts, decorations, and special food as an important reason to borrow money and so try to make do with the funds they already have.
However, many do take out a loan to cover their Christmas spending.
The process of getting a loan for Christmas is like getting a loan for any other purpose.
Usually, you can make an online application for a loan with your chosen lender. They will then check your details, credit history, and circumstances and decide whether to approve your application.
Then, if your application is approved, they will send the money directly to your bank account, where you can use it to cover any Christmas spending.
Paying back a Christmas loan is just the same as paying back any other type of loan. Usually, you will make monthly repayments over a set period until the loan plus any fees and interest has been fully paid off.
Christmas loans come with a range of terms and conditions. These vary depending on the lender, the product, and your circumstances.
The terms that will apply to your loan will depend on whether you've taken out a secured or unsecured loan and whether yours is a payday loan or regular short-term loan.
Many Christmas loans are payday loans under a different name. With this type of product, your credit score may not be checked, and you'll receive your money very quickly, which makes them a popular choice amongst those with poor credit.
However, the interest rates are very high, and all the money together with the applicable interest must be paid back within a couple of weeks or months.
If you take out a loan for £500 over two weeks at an APR of 390%, you will pay £575 in total – a large amount of money to find within such a short space of time.
Traditional personal loans are cheaper, but still may have a higher interest rate because the loan period is relatively short.
If your credit history isn't good, your APR can be as high as 49%. Those with an excellent credit score can benefit from a lower advertised rate – sometimes as low as 10% APR.
The terms on this type of loan for an average borrower could be something like this:
A loan for £1000 over 2 years with a 20% APR will cost around £222 in interest.
Of course, bear in mind that if you take out a loan for two years just to cover your Christmas expenditure, you'll be paying off your bills for this Christmas for the next two Christmases to come.
The amount you'll be able to borrow with a Christmas loan will depend on your financial circumstances and the lender you choose, but often the lowest amount will be £1000, with the highest amount being £5000.
Anything lower than £1000 is more likely to be a payday loan and will have a very short repayment period.
As a Creditspring member, you’ll be entitled to two loans of up to £500 per year with no-interest (Rep APR 66.2%) and no hidden charges, only a low membership fee.
This makes Creditspring loans a cost-effective and straightforward way to borrow a little extra money to tide you over during the festive season without breaking the bank.
With affordable regular monthly repayments, you'll be better able to manage your finances and budget, and when you make your repayments regularly, you'll be giving your credit score a boost.
Find out if you’re eligible to become a Creditspring member today, and plan ahead for the holiday season!