Christmas Loans – do they bring New Year’s Hangovers?

Christmas is upon us, as is the seasonal spending splurge. Many people will be using various kinds of loans and/or credit cards. You may choose from a Personal Loan or a Secured Loan.

Whatever kind of loan that you need to see you over the holidays, you need to make sure that your loan has the following:

1. a competitive interest rate – be prepared to shop around to find a good interest rate, don’t just jump at the first offer that comes in the mail.

2. a suitable period – do you still want to be paying this year’s Christmas holiday expenses in 36 months or even longer? What happens when next year comes along?

3. make sure there are no early repayment penalties on your loan. Should you opt for a 36 month loan, you don’t want to find out your out of pocket if you repay early! Some policies include a penalty.

4. read the loan documents and make sure your payments don’t attract loan penalties.

Secured loans generally offer a better interest rate than an unsecured loan, as it is secured against an asset, and represents a lower risk to the lender. If you choose such a loan, make sure that you understand that the secured loan is secured against something you OWN, ie. a house.
Whichever route you decide on, you need to do a little homework on the loan before you can go shopping!