Most Americans spend hundreds, if not thousands, on holiday-related purchases each year. While you may have saved up extra cash throughout the year for your anticipated expenses, it can be wise to have a backup plan. Don’t let unexpected holiday expenses end up tanking your savings.
A holiday loan can add financial security to your plans, but there are tips to ensure that it won’t end up adding extra stress, too. If you’ve already budgeted and have a plan to pay it off quickly, then you’re in great hands. If you’re not careful, a holiday loan can overstretch your budget and lead to payments long after the packages are unwrapped.
What is a Holiday Loan?
A holiday loan is a personal unsecured loan used for holiday expenses and issued by financial institutions such as banks, credit unions, and online lenders. From plane tickets to gifts to ski or snowboarding trips, it can be a great way to provide for your family’s holiday bliss without the added stress of using cash now.
Since holiday loans are unsecured, they don’t require collateral and typically range between $500 and $5,000. The size of your loan and your interest rate depend on factors such as credit score and income. At Members Exchange Federal Credit Union (MEFCU), we offer competitive rates because we’re member-owned and dedicated to providing fewer fees and a personalized approach to customer service. MEFCU offers a range of holiday loan options.
How Do Holiday Loans Work?
The terms of holiday loans vary, but borrowers can expect to make fixed payments over a set period. Many lenders require a good credit score to qualify for a holiday or personal loan with a lower APR than what you might pay on a credit card. MEFCU assesses your credit history fairly to create a plan that works for you, with fixed monthly payments and a set APR that keeps your holiday spending predictable.
According to Bankrate, holiday loans are typically available during the holiday season and often have lower limits than other personal loans. MEFCU offers holiday loans ranging from $2,500 to $25,000 to qualified members with repayment periods from 1 to 48 months.
When to Apply for a Holiday Loan?
A holiday loan can be a good option if you know that you can pay off the balance quickly. As long as you can wipe out your debt within a few months, it may be the right choice. A short-term repayment period can make holiday spending feel manageable, whether you’re planning a snowy getaway or a cozy family gathering.
If you anticipate a holiday bonus, you can use those funds to pay off your loan even faster, making a holiday loan a convenient choice. However, if you’re unsure about income availability, consider adjusting your plans for a more budget-friendly holiday.
Other Options for Financing Holiday Expenses
If you’re trying to avoid paying additional interest on holiday purchases, here are other ways to cover your seasonal expenses:
- Setting a Budget: Use your cash flow to determine a spending limit.
- Saving Throughout the Year: Build a holiday fund early, even with just $25–$50 a week.
- Buying Early: Shop early to spread out purchases, helping prevent a single large expense.
- Seasonal Earnings: Consider a holiday job or side gig for extra cash.
- Using Buy Now, Pay Later Services: Options like Affirm or Afterpay can offer structured payment plans for holiday purchases.
Bankrate’s 6 ways to help with holiday finances recommends starting to save money as early as possible to build a financial cushion and reduce the risk of taking on debt.
MEFCU Credit Card Options for Holiday Flexibility
If you’re interested in a flexible line of credit, MEFCU offers credit cards with competitive rates. This option is ideal if you prefer financing without the fixed terms of a holiday loan. MEFCU’s credit cards allow you to manage your spending with no annual fees.
Consider an Auto Loan for Holiday Travel
Planning a winter road trip or visiting family across the state? This holiday season could also be the perfect time to upgrade your vehicle. MEFCU’s auto loans offer favorable rates and terms to make purchasing or refinancing a vehicle more affordable. Reliable transportation can help ensure you and your family travel safely and comfortably this winter.
Get a Holiday Loan with Members Exchange Federal Credit Union
With the holidays around the corner, it’s wise to plan with a holiday loan from Members Exchange Federal Credit Union. We can help you stick to your budget and access the cushion you need to ring in the cheer your way. Avoid overdrafts or depleting your savings by applying for a holiday loan today. Contact our financial representatives if you have any questions; we’re here to make sure the holidays stay happy for our members.
Whether you’re interested in a holiday loan, credit card, or auto loan, MEFCU provides the flexibility and support you need. For more information, explore our latest blogs, call (601) 922-3350 or toll-free at 1-800-748-9459, or stop by a branch to learn more. From all of us at MEFCU, we wish you a joyful and financially sound holiday season!
