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A Christmas Loan involves borrowing money through financial products such as payday loans, bad credit loans or installment loans to help those short on cash in the build up to and during the festive period. The holiday season can undoubtedly get expensive and so those who need fast cash can apply for a loan. 

According to the National Retail Federation’s survey, consumers plan to spend on average $997.73 on themselves and their families this holiday season. So it is not surprising that many look to loans to help boost their cash flow. This guide will delve deeper into the nature of Christmas loans, why people may want to borrow them and how they can go about doing so.


Why Would I Need A Loan For Christmas?


It is not surprising that many people need to borrow money for Christmas. There are many costs associated with the festive period including presents, a Christmas tree, food, decorations, costumes, Christmas crackers, traveling to be with family or friends and more.

In these cases, many may wish to get a loan to help stretch their holiday budget. This can take the pressure off and boost their finances during this special time.

As well as this, those who have spent a large portion of their paycheck on Christmas costs may then face an unexpected emergency expense that they need to pay off urgently. Examples include house repairs such as fixing a broken boiler, having to pay for a medical, dental or vet bill, or unanticipated fees such as funeral costs.



How To Borrow A Christmas Loan


In the same way as you would apply for a payday loan, you can access a Christmas Loan by submitting a loan application form, entering key details such as the amount you wish to borrow and how long for. It is important to note that the lender may not approve your requested amount as they base their loan offer off factors such as your monthly income and may wish to offer you less so that they are confident you will be able to manage the repayments.

You will then receive a loan offer which you can choose to accept or decline. If you decide to go ahead, the money will then be sent to your live checking account. You will also have a repayment plan whereby you will pay back the loan with additional interest on a date agreed upon with your lender. 


What Are the Requirements For Borrowing A Christmas Loan?


Similar to other loan types, requirements for a Christmas loan will include that the borrower must:

  • Be aged a minimum of 18 years old This is to ensure that the borrower is a legal adult who can handle the financial responsibility of taking out a loan. 
  • Be a permanent resident or citizen of the US Before applying, the borrower should first check the rules and regulations in their state as payday loans are only legal in 37 of the 50 US states, and terms vary depending on the location. 
  • Have a reliable source of income – Whilst ideally lenders will have a source of income from a stable job, some lenders will also allow other forms of income even if the borrower is unemployed or jobless. This includes disability allowances, pensions or other government benefits that the borrower receives regularly.
  • Have a checking account – It is essential for the borrower to have a bank account for the funds to be transferred into.
  • Have verification of their identity – A government-issued identification card or driver’s license with key details such as your name, date of birth and address is important to help lenders verify your identity. 


Can I Get A Christmas Loan With A Bad Credit Score?


Those with poor credit should be able to secure a Christmas loan as there are usually lots of options available for them. For instance, at Dollar Hand we work with reputable lenders across the US who are willing to consider customers from all different types of financial backgrounds. The loan amount may just be slightly smaller or the interest rate could be slightly higher due to the larger level of risk involved. 

There are also other types of loans for those with bad credit. For instance, using collateral through financial products such as home or car title loans which ties these products to the Christmas loan and reduces the risk for the lender.


What Are Some Alternatives To A Christmas Loan?


There are many alternatives to getting a Christmas loan that you can consider. For instance, you could borrow money from family and friends if you were comfortable with doing so. You could use a low-interest credit card, look into an authorized overdraft or even try to borrow from your employer if possible. 

You could also try to get some extra cash by selling items you no longer need on popular platforms such as Facebook Marketplace, Vinted or eBay. Alternatively, having a garage sale could help you build up some extra dollars. 

Saving money around the house by reducing your energy consumption through simple techniques such as showering instead of bathing could also help you save up some more money to spend on Christmas. Likewise, reducing your petrol consumption through a few easy hacks could significantly decrease your travel costs. For more information check out our guide on ‘How To Save Money on Petrol’. 





If you are looking to avoid stress over the festive season brought about by a small budget, then you can certainly consider getting a Christmas loan. Just make sure that you are confident that you will be able to manage the repayments as otherwise you could incur extra charges.

Justine Gray

Justine is a full-time writer, specializing in household income and consumer finance across the US.