The Best Holiday Loans & Financing in 2025

Holidays can be stressful, especially if you’ve had an unexpected job loss or are facing a tough financial season. If money is tight this year and you’re looking for ways to pay for gifts and events, a holiday loan can provide a way to meet your temporary financial needs. Find out what types of holiday loans are available, how they work, and how much they’ll cost.

Compare holiday loan rates

Best holiday loan lenders 

The best ways to finance holiday expenses are with a 0% APR credit card, a personal loan, or a 0% BNPL plan. But if you’re not eligible for a 0% APR card or need more than six weeks to pay a BNPL loan, a personal loan is a much better choice than a standard credit card. Average rates are lower and the money could be in your account as soon as the same day you apply. Plus, it’s quick to check customized rates without a hit to your credit.

What is a holiday loan?

A holiday loan is any type of loan you use for holiday expenses; it’s not limited to personal loans, although they’re a popular choice. In addition to personal loans, holiday loans can include buy now, pay later (BNPL) plans, credit cards, and store credit cards. While all these options are considered holiday lending products, they vary greatly in their fees, rates, and repayment plans.

Types of holiday loans

Here are the main types of holiday loans you can expect to see as you prepare for your upcoming spending:

Pros and cons of holiday loans

Pros

• Multiple types to choose from: There are several types of holiday financing to choose from, giving you flexibility to find an option that works for your budget. 
• Can accommodate borrowers with bad credit: Most BNPL lenders don’t run a hard credit check to qualify you, so they might be more accessible for borrowers with low credit scores.
• No-interest options available: Credit cards and store cards with promotional offers, along with short-term BNPL plans, don’t charge interest for a certain period of time or at all.

Cons

• Interest and fees: Most holiday financing options charge an interest rate and assess fees for late payments. 
• Deferred interest: Watch out for deferred-interest promotions. If you pay off the entire balance by the end of the deferred interest period, you’re good. And you’ll have benefited from 0% interest financing. However, if you have anything more than a $0 balance, you’ll owe all the interest that accrued during that period at the card’s standard rate. 
• Might not be a good fit for those with fluctuating income: If your income changes from month to month, you might have months when you can’t afford your loan payment and could risk late fees, losing a 0% promotional offer, and a hit to your credit score. 

How much do you pay for holiday financing?

Generally speaking, you’ll have to pay interest on holiday loans unless you’re taking out a short-term BNPL loan, have a 0% APR offer from a credit card, or enroll in a deferred-interest plan on a store credit card (and pay it off before the deferred-interest period ends).

Most lending types have interest costs based on the loan’s APR and repayment term. The table below shows borrowing costs for four different lending options based on typical APRs for borrowers with good credit: 

Interest costs for different loan terms, APRs, and loan types

You can also use a loan calculator to help estimate the cost of your holiday financing at different interest rates.

How holiday loans affect your credit

The impact that a holiday loan has on your credit depends on which lending product you get. Here’s a quick explanation of how each type affects your credit score: 

• Personal loan: If a hard credit check is required, you may see your score drop a few points initially. Over time, however, your score might rise if you make consistent on-time payments. 
• Credit card (regular and store): As with personal loans, your score could temporarily drop a few points when you apply. If your application is approved, your credit score could potentially rise and fall as you use less or more of your credit limit. Additionally, making on-time payments can improve your score over time. 
• BNPL: More BNPL plans are being reported to credit bureaus regardless of plan length, which means on-time payments can help your credit while late or missed payments will hurt it. The percentage of your purchasing power used could also impact your credit score. However, not all plans conduct a hard credit pull when you apply.

What is a tax refund holiday loan?

A tax refund holiday loan may be based on the predicted amount of your tax refund and is designed to be repaid with your tax refund. Tax firms like Jackson Hewitt and HR Block may offer these loans and may require you to go through an approval process to get the loan. Tax refund holiday loans often have advance limits that are lower than other forms of holiday financing, but may not require a credit check, which could make them a good fit if you have bad credit and can’t find financing elsewhere. 

Tax refund loans may carry a finance charge and/or an interest rate — compare the APR of any tax refund loan or advance to other financing options before agreeing to it.

Should I get a holiday loan?

It depends. It’s important to think about the implications of holiday financing before taking out a loan, says Sandy Yong, founder of personal finance site The Money Master.

If you’re deciding with a partner, “having upfront conversations to set expectations can help everyone be on the same page.” She also recommends being open to adjusting your plans. “You could suggest affordable ways to spend the holidays together. For example, instead of going to a restaurant, you could suggest a potluck.”

While holiday financing may be necessary because of an unanticipated job or income loss, it shouldn’t be treated as a regular solution.

How to apply for holiday financing

Applying for holiday financing is a relatively simple process that’s often online. Once you submit an application, the lender will review it and, in many cases, provide you with an instant decision. 

Here are the general steps you’ll take to get a holiday loan:

1. Determine how much you need: Create a budget for your holiday expenses to determine the loan amount you need and only borrow up to that amount. 
2. Determine how much you can pay monthly: Then, check your regular budget to know what monthly payment you can afford. This will help you determine the type of loan(s) and repayment terms that are an option for you (step #4). 
3. Check your credit score: Your bank or credit card issuer may offer free credit score checks, or you can use Credible's free credit monitoring tool. See where your score stands to get an idea of the rate you might pay.
4. Compare holiday loan lenders: Prequalify with at least five lenders to compare loan amounts, APRs, repayment terms, monthly payments, and fees, along with customer satisfaction ratings, and customer service accessibility once you've found a few contenders. Then, find which repayment terms give you an affordable monthly payment.
5. Submit an application: Gather your information and documents, like pay stubs and ID, to submit your application with the lender of your choice.

How to compare holiday financing lenders

“When you're deciding between different lending products, you'll want to review the fine print,” Yong says. “Compare the interest rate charges, penalties, or fees, and the timeline that you anticipate to pay off your balance in full. These factors will impact which credit product is suitable for your situation.”

As Yong points out, you can increase your chances of finding the best holiday deal by researching your options based on the following criteria: 

• Monthly payment: If you prefer a fixed payment you can easily track, personal loans and BNPL plans may be a good fit. Credit cards, on the other hand, tend to have monthly payments that can change from month to month based on your balance and APR. 
• Interest rate: The lower the interest rate, the less your loan will cost over time. When possible, try to use the holiday lending option with the lowest rate. 0% offers from credit cards can be a good option. But avoid deferred interest offers on store credit cards if you’re not confident you can pay the entire balance before the promotional period ends. If you need years to repay, a personal loan will often be the best choice.
• Fees: Some loans charge origination fees, which your lender may take from the loan amount before it sends the money (thereby reducing how much you receive). Many personal loans, credit cards, store credit cards, and BNPL plans often charge late fees and insufficient funds fees.

Alternatives to holiday loans

If financing isn’t for you, consider tried and true loan alternatives and/or get creative about spending the holiday season without spending a lot of money.

• Friends and family loans: This could be a mutual gift in disguise. If you know someone in a position to loan you money at a fair rate (and you can easily afford repayment), you could save on a loan and they could make some extra cash. Just get everything in writing — you might use an online service to facilitate. 
• Thrift, budget, and estate sale gifts: Start frequenting stores and sales that offer lightly used goods at a steep discount. One trip may not do the trick as you’ll likely need to do some hunting to find hidden gems. 
• Homemade gifts: Don’t knock it before you consider the possibilities (along with where your talents lie). In addition to all manner of baked goods, you could gift flower or plant arrangements, knitted scarves or throw blankets, a jacket from the clearance rack that you upgraded with a DIY zipper repair, a project from your woodshop, etc. 
• In-home celebrations and group potlucks: Times are a little tougher this year for a lot of people. Your friends and family might appreciate setting a potluck precedent so that no one has to pull off (and pay for) a multi-course celebration.
• Make a video: You can use the software that came pre-installed with your laptop (or even your phone) to create a photo montage set to music. TikTok is a great way to make creative short videos, too.
• Stay home this year: This is a great year to avoid traveling if you can, but it can also save you a lot of money and stress. 

Methodology

Credible evaluated 32 lenders across 1,216 data points to find the best holiday loans. We chose the best lenders based on the following weighted categories:

• Rates and fees: 18.75%
• Eligibility and options for bad and no credit: 17.5%
• Availability: 12.5%
• Loan amounts and terms: 10%
• Customer satisfaction: 10%
• Customer service: 10%
• Efficiency and fund delivery: 10%
• Discounts: 7.5%
• Credible proprietary data: 3.75%

Credible’s team of experts gathered information from each lender’s website and from our partners directly. We also considered each of our partner lenders’ statistics over a 12-month period — including average funding times, average credit scores for approved applicants, and average rates. Each data point is verified by a senior editor to make sure it’s accurate at the time of publication. 

Learn more about how Credible rates lenders by exploring our personal loans lender rating methodology.

Disclosure: Some lending partners that participate in Credible’s comparison marketplace offer loans to borrowers with scores as low as 550. Borrowers with low scores will have fewer lending options than borrowers with higher credit scores.