• Is a Personal Loan for Me?
• Loans vs. Credit Cards
• Borrowing Considerations
• Tips for Responsible Borrowing
• Borrowing for a Balanced Holiday

The holiday season is an exciting time, yet it can also bring financial stress with some pretty costly expenses. With gift shopping, travel, and those big-ticket purchases like home upgrades, figuring out how to cover these costs can feel overwhelming.

If you’re considering a personal loan, credit card, or retail card, you’re not alone. These flexible financial options can help cover expenses so you don’t break the bank, and understanding your options is key to making smart financial decisions this holiday season.

Which loan is right for me?

Let’s say you have large expenses during the holidays. In this case, a personal loan may be a good fit. You get a lump amount that you pay back over a course of monthly payments. Some benefits include:

• Use it on what you want: Cover holiday travel or a vacation, check off your gift list with ease, finance a home improvement project like a new kitchen, or consolidate high-interest credit card debt to save money over time.
• Fixed payments: Predictable monthly payments, making it easier on you and your budget.
• Lower interest rates: Personal loans typically offer lower rates compared to credit cards or retail store cards.
• Flexible terms: Borrow only what you need and repay it over a set timeframe that works for you.
• Deferred payments: Some loans allow for delayed repayment (such as 90 days payment-free), giving you financial breathing room when you first receive the loan. Plus, some financial institutions allow you to skip a payment once or twice a year with a low fee.

What about a credit card? When would it be a good idea to get a credit card instead?

• Variable payments: When you make purchases using your card, ensure you’re able to make the minimum monthly payment – or better yet, pay off the statement each month. By paying off the statement each month, [insert content here].
• Compare terms: Check out the terms from the retail store card you’re interested in versus the one at your financial institution. The lower the rate, the better it is for you.
• Reward programs: Some cards offer reward points that can provide significant benefits depending on your lifestyle and spending habits.

Loans vs. Credit Cards: What’s the Difference?

Not all borrowing options are the same. To help, here’s a quick comparison of a personal loan, credit card, and a retail store card:

Still not sure which to get?

That’s completely okay. You may want to consider your needs, budget, what you’re looking to spend in the next couple of weeks, and who to borrow from. Below are some borrowing considerations we recommend when you’re interested in a personal loan, credit card, or a retail store card.

Assess your needs and budget: Determine how much you truly need to borrow by creating a detailed budget for the holidays. It’s simple — create three columns. Label the first column “Expenses” and include travel, gifts, decorations, and any other expenses. Label the second column “Costs” and put a number in there for each of those items (feel free to round up). Label the last column “Priority” and put either ‘Need’ or ‘Want’. This will help you narrow down the items to help avoid the temptation to borrow more than necessary; it’s always better to keep debt under control. Total up the column with “Costs” and those labeled with “Need” and that should give you an estimate of how much you’re looking to borrow.

Review loan terms carefully: Not all loans are the same; compare lenders to find the best terms (number of months, monthly payment, and interest rate) for your needs. Pay attention to interest rates, repayment terms, and fees.

Calculate the total cost of borrowing: Consider the full cost of the loan, including interest and fees. This helps you understand how much you’ll repay over time and ensures your monthly payments fit into your post-holiday budget.

Tips for Sensible Borrowing

Borrowing wisely means having a plan in place to manage your finances before, during, and after the holiday season. Here are some tips:

• Create a repayment plan: Outline exactly how and when you’ll repay the loan. Align it with your monthly budget to avoid financial strain after the holidays.
• Budget for the future: Include your loan repayments in your post-holiday household budget. This ensures you can handle regular bills and obligations while repaying the loan.
• Avoid over-borrowing: Borrow only what you need to cover essential expenses. Taking on more debt than necessary can lead to long-term financial challenges.
• Stay disciplined: It’s easy to get carried away with holiday spending, especially when borrowing feels like a quick fix. Remember to stick to your pre-determined budget and avoid unnecessary expenses. Responsible borrowing ensures that you enjoy the season without facing regret in the new year.

Borrowing for a Balanced Holiday

The right loan option can help you tackle holiday expenses while keeping your finances in check. Whether you’re managing travel, gifts, or a home improvement project, a personal loan offers predictable payments and lower interest rates compared to other borrowing methods.

By assessing your needs, reviewing loan terms, and planning your repayments, you can enjoy a stress-free holiday season without overextending your budget. Borrow smart, spend wisely, and make this holiday season a joyful and financially secure one.

Be sure to learn more about Advia’s Holiday Loans today!