Financial assistance specialised to offer support during the festive season might not always be the right solution. They are accessible ahead of the holiday season. Besides, you cannot use them for a purpose other than festivity expenses.
However, getting these loans might prove to be expensive for your pocket. How? Some other loan options might allow you to take the same advantage without paying extra money. Therefore, blindly opting for these loans just because it is Christmas should not be the case with you.
You should not apply for these loans unless you have a specific purpose in mind. Pay attention to the price you will have to afford while obtaining loans for Christmas. If it is within your budget, there is no restriction for you to go ahead.
On the other hand, you must look for alternatives if these loans cannot satisfy your purpose. If you have to take out debt to sail through essential payouts in this festive season, it would be better for you to compare options first. Otherwise, you might conclude with the wrong option.
Opting for a loan during the festivity is not always the best solution. This blog will let you peek into some alternative ways of dealing with the financial problem.
Skip loans before Christmas for other options
You will always get some alternatives amidst a crisis. Savings can put you in a safer place by not letting you borrow money from outside sources. However, you have to search for the right way to manage a financial problem when there is no cash backup.
For example, you have left your job and are looking for the right one. You will need to invest some time when you should be handling expenses alone. In this particular time, benefit loans from a direct lender can be a suitable choice for you.
This loan option will cover your necessities when you do not even have a job. Besides, they are easy to obtain when you are sustaining expenses on benefits. Therefore, the right loan option can help you get out of the financial problem.
Validate if Christmas loans are the only choice or if you should look further.
1. Use the credit card mindfully
This card gives you access to a form of debt. The only difference is that you can earn money by using it in the smartest way. With this option, you have the privilege of using interest-free credit for a certain period.
It would need you to maintain the credit card balance by paying it off in full and on the specified date of the month. When you meet payments on time, you get a free hand to use for trivial necessities like purchasing Christmas gifts, etc.
One thing you must not do with your credit card is to draw out money. It is because you will have to pay more on interest rates in this case. This rate is much higher than what you have to disburse on completing a purchase.
Avoid chasing the lowest amount that you must pay off. You should try to meet the maximum portion of your balance in order to make the most out of this card. Disburse credit card payments every month without fail.
There is no obligation on you to wait to clear the payment until your bank sends some statement. If not the required amount, you must try to pay the minimum amount so that your credit scores do not have to feel any impact.
2. Contemplate getting a personal loan
Christmas loans might have some limitations regarding their usage. You do not have to go through any such things if you consider getting personal loans. You are independent in deciding the purpose, provided you are capable of meeting the repayment conditions.
The best thing about these loans is that you can achieve them with or without collateral. As per your capability and requirement, you can choose the option. You can personalise the purpose without any inhibitions.
Choosing the repayment term is a flexible decision. You can opt for a shorter duration if you do not want to shell out more money on interest. The payments will spread over months, thereby minimising your financial burden.
3. Utilise the overdraft facility
Find out more about the overdraft facility accessible with your bank account. Every user gets a certain limit defined for this provision. It permits you to spend money up to the given extent, even if it exceeds the amount that you have in your account.
You should be ready to meet a fee that applies to this facility. All you need to do is to compare if the interest rates or this particular fee will be convenient for you. Besides, you must assess if getting the overdraft amount can solve the ongoing problem or not.
A couple of comparisons and evaluations are a must before you think of utilising this overdraft facility. Crossing the overdraft limit set for you would mean you will have to face additional charges. Consider evaluating your future plans, as this step might draw a bad impression about you in the minds of the lender.
4. Emphasise savings over other options
Knowingly or unknowingly, you acquire the habit of saving. Most of you are used to this second behaviour and have a cash backup. It does not matter how much cash you have stashed so far.
Even if it is a small amount, you can make use of it to reduce some portion of the debt. You can handle the rest in any other way. It would be great if you make it a habit to save religiously for Christmas every year.
This arrangement will prevent you from getting into any uncomfortable situation. You must try to increase the amount every year, considering the rise in the cost of items. Savings will help you avert any unexpected debt situation.
The bottom line
Getting a loan ahead of the festival is not the only sure-shot way to tackle any financial chaos. Depending on your situation, you can think otherwise and choose other options over loans.
Jessica William operates as a Senior Consultant and Chief Content Editor for 10 years at 1Onefinance. She assists the firm in getting a grip on the new lending laws and regulations. She does so by researching the trends, consumer requirements, and new audience preferences. Jessica is responsible for making important financial and administrative decisions.
Apart from helping consumers with the best solutions, Jessica Williams helps them ensure financial stability. She analyse the business data, finances, expenses, and revenue/ income of customers and determines necessary changes. Jessica finished her Doctorate in finance and law and implements her knowledge to the best interest of the firm and customers.