We researched the best personal loans you can use to cover Christmas expenses, and our top pick is SoFi, based on its large loan amounts, autopay discounts and long repayment terms, which can give you more flexibility for your holiday shopping. Other top picks include Avant and Upstart.
Even if you’ve saved ahead of time, it can be challenging to make it through the holidays without taking on debt. Fortunately, there are different types of Christmas loans available — many with better rates than your credit card. Depending on which you choose, a Christmas loan can offer flexible loan amounts, competitive interest rates, and long repayment periods.
Compare Christmas loan rates in 2025
Advertiser DisclosureOverview
LightStream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses. Plus, rates on LightStream personal loans were the lowest among all Credible partner lenders, on average, for borrowers with good, very good, and excellent credit, according to Credible personal loans data over the past year. There are no origination fees and loans can be used for a wide range of purposes
Funds are available as soon as the same day you apply, and you'll have up to 20 years to repay certain types of loans, including home improvement loans, RV loans, and boat loans.
Unlike most lenders, LightStream does not let you prequalify on its site — but you can prequalify through Credible. LightStream scored better than average in J.D. Power's 2025 U.S. Consumer Lending Satisfaction Study, beating out online lender SoFi by one position.
pros
- Same-day funding available
- High maximum loan amount
- No origination fee
cons
- Good credit required
- No prequalification process
- Not available in Vermont
Repayment terms
2 - 20 years, depending on loan purpose
Eligibility
Available in all states except VT
Time to get funds
As soon as the same business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Read full reviewOverview
Best Egg is a solid lender for a wide range of borrowers. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, which means borrowers with fair credit are eligible. Plus, Best Egg is one of a handful of Credible partner lenders to offer secured loans, and the only one we know of that offers loans secured by the fixtures in your home. This can be a great way for homeowners to lower their rate, while not putting their actual home up as collateral.
However, Best Egg loans may have an origination fee, which ranges from 0.99% to 9.99% of the loan amount.
pros
- Secured loans available
- Low minimum income requirement
- Wide range of loan purposes allowed
- Funds in 1-3 business days
cons
- Origination fees
- No discounts
- Not available in DC, IA, VT, or WV
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Read full reviewOverview
More borrowers are able to prequalify with Upstart compared to all other Credible partners, based on Credible personal loans data. This could make the lender a good choice if you have at least fair credit and have struggled to qualify with other lenders. It also offers loans as low as $1,000, which makes it a good choice if you need a small loan. Just know that Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed. However, it received a below average score in J.D. Power's 2025 U.S. Consumer Lending Satisfaction Study.
pros
- May fund in 1 business day
- No minimum credit score requirement on lender site
- Low minimum APR
- Trustpilot score of 4.9/5 stars
cons
- May charge a high origination fee
- No discounts offered
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Read full reviewOverview
LendingClub makes loans to borrowers across the credit spectrum and stands out for its low rates, based on Credible personal loan data. The lender had some of the lowest APRs for borrowers with fair credit (FICO 580 - 669), very good credit (FICO 740 - 799), and excellent credit (FICO 800+), compared to other Credible partner lenders. The lender has a low minimum income requirement, wide availability, and offers a mobile app for streamlined loan management.
LendingClub may charge an origination fee between 3% and 8%.
pros
- Mobile app
- Low minimum income requirement
- High close rate on loans made through Credible
- Available in all states
cons
- Origination fee
- No discounts
- Funding not as fast as some competitors
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Read full reviewOverview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers and borrowers with low annual incomes. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
pros
- Fair credit borrowers eligible
- Autopay and direct pay discounts
- Can fund in as little as 1 business day
- Mobile app
- Secured loans available
- Low annual income requirement
cons
- High maximum origination fee
- Cosigners not accepted on home improvement loans
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Read full reviewOverview
SoFi personal loans feature high loan amounts, competitive interest rates, as soon as same-day funding, and long loan terms, plus discounts for autopay and direct pay. Plus, SoFi offers live chat and free financial advice for customers. Unlike many other online lenders, SoFi is an FDIC-insured bank, which means SoFi makes loans directly and does not partner with a third-party to originate loans. It also means that you could have your checking, savings, and loan accounts all in one place.
To qualify for an unsecured loan, it's best to have good credit. But unlike other lenders, SoFi doesn't specify a credit score minimum. It also has optional origination fees — you might elect to pay on to reduce your interest rate. Minimum loan amounts start at $5,000.
pros
- Large loan amounts available
- Autopay and direct pay discounts
- Same day funding
- Long loan terms available
cons
- Not transparent about minimum credit score requirements
- 5,000 minimum loan amount
Fees
Option to pay an origination fee in exchange for a lower rate
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
Read full reviewOverview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
pros
- Borrowers with bad credit considered
- Funds as soon as the next business day
- 2-year loan terms available
cons
- No discounts offered
- Origination fee
- Not available in HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Read full reviewOverview
BHG Financial stands out for offering the largest loan amounts — up to $250,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Loan funds are available within five to 14 days of loan approval and must be used for debt consolidation or credit card refinancing.
pros
- Eligible applicants can borrow up to $250,000
- Considers borrowers with fair credit
- Long repayment terms
cons
- Not available in AL, HI, ID, IL, LA, ME, MT, NV, ND, and VT
- No discounts
- Minimum annual income requirement of $100,000
- Funding takes at least five days
Fees
Origination fees, late fees, other fees may apply
Eligibility
Available in all states except AL, HI, ID, IL, LA, ME, MT, NV, ND, and VT
Loan uses
Debt consolidation, credit card refinancing
Read full reviewOverview
Universal Credit offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.
pros
- Borrowers with low credit scores considered
- $25,000 annual income requirement
- Autopay and direct pay discounts available
- Can fund in one business day
cons
- High APRs
- Potentially high origination fees
- Not available in Iowa
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Read full reviewOverview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.
pros
- Flexible eligibility requirements
- Offers secured options
- Competitive bad-credit loans
- Physical presence
cons
- Availability
- Origination fees
- High starting APR
- Low maximum loan amount
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Read full reviewOverview
LightStream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses. Plus, rates on LightStream personal loans were the lowest among all Credible partner lenders, on average, for borrowers with good, very good, and excellent credit, according to Credible personal loans data over the past year. There are no origination fees and loans can be used for a wide range of purposes
Funds are available as soon as the same day you apply, and you'll have up to 20 years to repay certain types of loans, including home improvement loans, RV loans, and boat loans.
Unlike most lenders, LightStream does not let you prequalify on its site — but you can prequalify through Credible. LightStream scored better than average in J.D. Power's 2025 U.S. Consumer Lending Satisfaction Study, beating out online lender SoFi by one position.
pros
- Same-day funding available
- High maximum loan amount
- No origination fee
cons
- Good credit required
- No prequalification process
- Not available in Vermont
Repayment terms
2 - 20 years, depending on loan purpose
Eligibility
Available in all states except VT
Time to get funds
As soon as the same business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Read full reviewOverview
Best Egg is a solid lender for a wide range of borrowers. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You'll need a FICO score of at least 600 to qualify, which means borrowers with fair credit are eligible. Plus, Best Egg is one of a handful of Credible partner lenders to offer secured loans, and the only one we know of that offers loans secured by the fixtures in your home. This can be a great way for homeowners to lower their rate, while not putting their actual home up as collateral.
However, Best Egg loans may have an origination fee, which ranges from 0.99% to 9.99% of the loan amount.
pros
- Secured loans available
- Low minimum income requirement
- Wide range of loan purposes allowed
- Funds in 1-3 business days
cons
- Origination fees
- No discounts
- Not available in DC, IA, VT, or WV
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
Read full reviewOverview
More borrowers are able to prequalify with Upstart compared to all other Credible partners, based on Credible personal loans data. This could make the lender a good choice if you have at least fair credit and have struggled to qualify with other lenders. It also offers loans as low as $1,000, which makes it a good choice if you need a small loan. Just know that Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed. However, it received a below average score in J.D. Power's 2025 U.S. Consumer Lending Satisfaction Study.
pros
- May fund in 1 business day
- No minimum credit score requirement on lender site
- Low minimum APR
- Trustpilot score of 4.9/5 stars
cons
- May charge a high origination fee
- No discounts offered
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
Read full reviewOverview
LendingClub makes loans to borrowers across the credit spectrum and stands out for its low rates, based on Credible personal loan data. The lender had some of the lowest APRs for borrowers with fair credit (FICO 580 - 669), very good credit (FICO 740 - 799), and excellent credit (FICO 800+), compared to other Credible partner lenders. The lender has a low minimum income requirement, wide availability, and offers a mobile app for streamlined loan management.
LendingClub may charge an origination fee between 3% and 8%.
pros
- Mobile app
- Low minimum income requirement
- High close rate on loans made through Credible
- Available in all states
cons
- Origination fee
- No discounts
- Funding not as fast as some competitors
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
Read full reviewOverview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers and borrowers with low annual incomes. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
pros
- Fair credit borrowers eligible
- Autopay and direct pay discounts
- Can fund in as little as 1 business day
- Mobile app
- Secured loans available
- Low annual income requirement
cons
- High maximum origination fee
- Cosigners not accepted on home improvement loans
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
Read full reviewOverview
SoFi personal loans feature high loan amounts, competitive interest rates, as soon as same-day funding, and long loan terms, plus discounts for autopay and direct pay. Plus, SoFi offers live chat and free financial advice for customers. Unlike many other online lenders, SoFi is an FDIC-insured bank, which means SoFi makes loans directly and does not partner with a third-party to originate loans. It also means that you could have your checking, savings, and loan accounts all in one place.
To qualify for an unsecured loan, it's best to have good credit. But unlike other lenders, SoFi doesn't specify a credit score minimum. It also has optional origination fees — you might elect to pay on to reduce your interest rate. Minimum loan amounts start at $5,000.
pros
- Large loan amounts available
- Autopay and direct pay discounts
- Same day funding
- Long loan terms available
cons
- Not transparent about minimum credit score requirements
- 5,000 minimum loan amount
Fees
Option to pay an origination fee in exchange for a lower rate
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
Read full reviewOverview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who've prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
pros
- Borrowers with bad credit considered
- Funds as soon as the next business day
- 2-year loan terms available
cons
- No discounts offered
- Origination fee
- Not available in HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, WV, WA, AP, AE, and AA
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
Read full reviewOverview
BHG Financial stands out for offering the largest loan amounts — up to $250,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You'll have up to 10 years to repay the loan, but you'll need an annual income of at least $100,000 to qualify and a FICO score that's 660 or higher.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 3% and 4%, depending on your financial profile. Loan funds are available within five to 14 days of loan approval and must be used for debt consolidation or credit card refinancing.
pros
- Eligible applicants can borrow up to $250,000
- Considers borrowers with fair credit
- Long repayment terms
cons
- Not available in AL, HI, ID, IL, LA, ME, MT, NV, ND, and VT
- No discounts
- Minimum annual income requirement of $100,000
- Funding takes at least five days
Fees
Origination fees, late fees, other fees may apply
Eligibility
Available in all states except AL, HI, ID, IL, LA, ME, MT, NV, ND, and VT
Loan uses
Debt consolidation, credit card refinancing
Read full reviewOverview
Universal Credit offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you've improved your credit score.
pros
- Borrowers with low credit scores considered
- $25,000 annual income requirement
- Autopay and direct pay discounts available
- Can fund in one business day
cons
- High APRs
- Potentially high origination fees
- Not available in Iowa
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
Read full reviewOverview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can't, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn't a given.
pros
- Flexible eligibility requirements
- Offers secured options
- Competitive bad-credit loans
- Physical presence
cons
- Availability
- Origination fees
- High starting APR
- Low maximum loan amount
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Read full reviewLearn More:
Best Christmas loans
There are a variety of Christmas loans available with different loan amounts, interest rates, repayment terms, and more. The ones below are personal loans, which are some of our favorites, as they have better rates than credit cards, on average, and can be repaid over one to several years, making them a potentially budget-friendly option. Take a few minutes to prequalify with our partner lenders below and see rates you may be eligible for. (Prequalification won’t hurt your credit, but a formal application could temporarily ding your score by a few points.)
Loan Amount
$5,000 - $100,000
Min. Credit Score
Does not disclose
Loan Amount
$1,000 to $50,000
Loan Amount
$2,500 to $40,000
I love Discover loan because they're great!
Loan Amount
$5,000 to $100,000
Loan Amount
$2,000 to $50,000
Loan Amount
$20,000 to $250,000
Loan Amount
$1,000 to $50,000
Christmas loans for bad credit
There are some borrowers lenders prefer over others. If you have bad credit, you’re probably in the latter category. Fortunately, there are lenders that specialize in bad-credit loans. Even though you’ll pay a higher interest rate, personal loans for bad credit tend to have much lower rates than no-credit-check loans like payday loans and cash advance apps.
Loan Amount
$1,500 to $20,000
Loan Amount
$1,000 to $50,000
Loan Amount
$1,000 to $35,000
Loan Amount
$1,000 to $50,000
Methodology
Credible evaluated the best personal loan lenders for Christmas loans based on factors such as customer experience, minimum fixed rate, maximum loan amount, credit score and income minimums, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Credible’s team of experts gathered information from each lender’s website, customer service department, directly from our partners, and via email support. Each data point was verified by a third party to make sure it was accurate and up to date.
Personal loans for Christmas
A personal loan is a type of installment loan, meaning you receive a lump sum upfront and then pay it off over monthly installments. Personal loans usually have fixed, competitive interest rates. And thanks to long repayment periods and no prepayment penalties with many lenders, you can choose to pay off your loan in months or years, whatever works best with your budget.
Of all Christmas loans, we particularly like personal loans for large purchases and expenses. This is because the average interest rate on a two-year personal loan was 12.33% (the most recent data), while the average credit card rate was 21.86%, according to the Federal Reserve.

Tip
According to the Fed, the average interest rate on a two-year personal loan was 9 percentage points lower than the average credit card interest rate.
There is no shortage of personal loan lenders on the market. With good credit, you may qualify for a personal loan through a traditional bank, a credit union, or an online lender. You’ll have fewer options with bad credit, but a spotty credit history doesn’t have to prevent you from getting the funds you need for Christmas. If you can add a cosigner to your application or apply for a secured personal loan, you may have an easier time qualifying. Just remember that a cosigner will be on the hook for payments if you default, and you could lose your collateral if the same happens on a secured loan.
To find the best personal loans for Christmas, prequalify with multiple lenders first, then compare the annual percentage rates (APRs). This will give you an idea of which loan will be the lowest cost.
Interest rates and loan amounts by FICO score and income ranges
If you’re curious how likely you are to qualify for a Christmas personal loan, what rate you might get, or how much money you might be approved to borrow, take a look at the charts below, which are based on Credible user data between April 2024 and March 2025.
In the first chart, we see that borrowers with high credit scores are likely to qualify for the lowest interest rates and highest loan amounts.
Personal loan interest rates by credit score
Based on Credible prequalified and closed loans data from July 2024 through June 2025. Source: Credible
But many people who apply for personal loans don’t have excellent credit. In the second chart, we see that average FICO scores, regardless of income, tend to be in the middle of the good credit score range. And income can serve as a compensating factor to help you get a lower rate or qualify for a larger loan.
Personal loan interest rates by income
Based on Credible closed loans data from July 2024 through June 2025. Source: Credible
Don’t be discouraged if you have poor credit. If you can’t qualify on your own, there are things you can do to increase your approval odds, such as improve your credit, apply with a cosigner, or apply with a joint applicant.
Plus, taking steps to improve your credit score before Christmas can help you receive a better rate or higher loan amount. Be sure to continue making on-time payments and try to lower your debt-to-income ratio (DTI).
0% APR credit cards
When you open a card with a 0% APR introductory offer, you’ll pay 0% for all purchases over the introductory period — often six months to two years. As long as you repay your balance during that time frame, you won’t pay any interest on purchases made during that time.
If you can pay off all or the bulk of the balance within the introductory period, it’s probably the best option to finance Christmas expenses. But if you can’t, you could end up paying a lot more once the APR adjusts (relative to other options). Keep in mind that you’ll need to have good credit to qualify for a 0% APR credit card offer.
Related: Personal Loan vs. 0% APR Credit Card
'Buy now, pay later' Christmas gifts
If you do your Christmas shopping online, chances are you’ll be offered the option to check out with a buy now, pay later (BNPL) service. This type of service allows you to break your purchase up into a series of installments, often paid biweekly.
For example, rather than paying $100 upfront for an item, you might pay $25 at the time of the purchase, and then $25 every two weeks until it’s paid off. If you can pay the balance within one to two months, you often won’t pay interest. Many BNPL companies let you spread payments over a year or longer, but you could pay interest up to around 36%.
If you can comfortably pay off purchases with four biweekly payments, BNPL can be a good way to finance Christmas gifts and expenses. But if you need a longer-term payment plan, compare BNPL to personal loans by prequalifying with a few lenders — this can help you see where you’ll get the better rate.
Tax refund holiday loans
A tax refund loan, also known as a refund anticipation loan, is a loan that’s based on a future tax refund. You can typically borrow this type of loan as early as December for the refund you’ll receive once you’ve filed your taxes.
The loan amount is based on your estimated refund amount. For example, if your expected refund is $2,000, that would be the maximum tax refund loan you’d receive. If your refund happens to be lower than expected, you’ll still be required to repay the entire loan. Additionally, refund anticipation loans charge interest. Some tax software companies offer interest-free refund loans, but you generally can’t get one until you’ve filed your tax return.
Expert editor insight: “You’ll need to plan ahead and file early if you want to apply for a tax refund advance. The typically become available starting in December through the following February. Also, tax refund advance providers like H&R Block and TurboTax require you to file your taxes with them in order to apply.”
— Barry Bridges, Personal Loans Editor, Credible
Christmas payday loans
A payday loan is a small, short-term loan, generally $500 or less, that must be repaid within a few weeks — usually on your next payday.
Payday loans are easy to qualify for because they don’t require a credit check, but they are also extremely risky. The fees on payday loans can equate to an APR of 400% or more, depending on your state, which can make them difficult to repay. Because of the predatory nature of these loans, they should only be considered as a last resort.
Payday alternative loans
We’ve talked about how payday loans are predatory, high-risk loans that should only be used as a last resort. But if you need a loan that’s easy to qualify for to pay for Christmas presents, consider a payday alternative loan (PAL) instead.
A PAL is a loan that’s offered by credit unions as a more affordable and flexible alternative to payday loans. Most are relatively small loans — generally between $200 and $1,000, though some loans are available up to $2,000. They also have longer repayment terms — up to six months or two years, depending on the type of PAL. And interest rates are capped at 28%.
Some credit unions may require that you’re a member for at least one month before you can be eligible for a PAL, while others may not. If you’re already a credit union member, this won’t limit your eligibility. But if you’re not, either plan ahead or find a credit union you can join, that offers PALs to new members.
FAQ
Where can I get a Christmas loan?
Open
You can get Christmas loans from a variety of sources, including traditional banks, credit unions, online lenders, credit card issuers, buy now, pay later services, and more. The best place to get a Christmas loan depends on how much you want to borrow, how quickly you can repay it, your credit profile, and other factors. Knowing this information will help limit the field. For example, if you need to borrow more than $2,000 and would like a year or more to repay it, a personal loan or tax refund loan might be your best option.
Where can I get a Christmas loan with bad credit?
Open
Certain types of Christmas loans are more appropriate than others for borrowers with bad credit. Some personal loan lenders offer loans to borrowers with bad credit. Payday loans are the easiest to qualify for, but are very expensive and often predatory in nature. Try a payday alternative loan from a credit union for better terms and a longer repayment period.
Meet the expert:
Erin Gobler
Erin Gobler has covered personal finance for more than 10 years, with expertise on mortgages, student loans, and credit cards. Erin's work has been featured by Fox, Business Insider, GOBankingRates, Newsweek Vault, and CNN.