Image courtesy of Infinit Accounting
December has come, and we all know what that means—the holidays are really upon us. With all the festivities happening this season, also comes a lot of gift shopping not just for our loved ones, but for ourselves as well.
Besides that, there are a lot of other things to spend on during the holidays such as food, parties, and vacations. So, it’s important to keep your money in check, since it’s easy to fall short during this hectic period of the year.
For this reason, you may take advantage of holiday loans offered by financial institutions (i.e. banks and credit unions), so that you won’t have to worry about your finances. A holiday or personal loan in the Philippines can be used for all your Christmas-related expenses, and it carries a low-interest rate, unlike short-term loans.
To walk you through the concept of acquiring personal loans for the holidays, we’ve provided relevant information that you should know to get the most out of this season.
Types of Holiday Loans
There are two options when it comes to holiday loans, namely personal loan and personal line of credit.
A personal loan typically has a fixed interest rate and payments, so that it is made in equal amounts over a specified period. It doesn’t also require any form of collateral such as your home or car.
On the other hand, a personal credit line involves tapping into funds only when deemed necessary. After the funds have been repaid, more funds can be borrowed again without having to re-apply for a new loan.
Interest is paid only on the amount of money loaned, which is very convenient, as it is a bit flexible and you’ll only have to borrow when necessary. The downside to this, however, is that it may lead to overspending.
To alleviate the problem of excessive spending during the holidays, and so as to not be buried in loan payments, it’s best to set a budget for holiday spending.
We all know how easy it is to get caught up on buying things during this time, since we like to reward ourselves for getting through the year and, well, because it’s Christmas. But, setting a budget is a wise move in ensuring that you don’t get too much into it and go overboard on your spending.
Another thing to note regarding holiday loans is to avoid borrowing more than you can repay. While these loans are convenient for the meantime, it’s important not to forget that payments have to be made sooner, rather than later. So, always keep this in mind.
Also, make sure you’ll be able to say no to impulse purchases if you can. If it is still within your allowable holiday budget, then go ahead. Then again, if you’re already on the ropes on your loan, then it’s best to say no for now because you can always buy that item later on.
The holidays are probably one of the happiest times of the year, and it’s the period when we like to give gifts to our family and friends.
Personal loans are a great option if you’re in need of extra cash to buy those gifts, especially when you’re feeling extra generous or going on that year-end trip that you’ve been planning for a while now.
While there are no issues with doing these, just make sure to use your loan wisely so that you can enjoy the holidays without worrying about post-holiday debts.