Christmas Loans UK
Every December millions of people in the UK struggle to pay for Christmas. Most will spend on average £500 on Christmas presents alone, meaning that they will start the new year significantly poorer. Of those, a substantial number will spend so much on their festivities that they'll sink themselves into masses of debt. As austerity continues to bite into people's cost of living, wages and expendable incomes, it should come as no surprise that many people turn to Christmas loans to help them afford the increasing expense of Christmas.
What are Christmas Loans?
Christmas loans are in essence a 'festive' payday loan. They are often advertised as a convenient way of raising enough cash to help the person in receipt of the loan pay for their Christmas expenses. These loans are based on the idea that traditionally many people borrow money to pay for Christmas via a credit card or an unsecured loan. Both of these examples are perfectly legitimate ways of paying for Christmas if they are planned and processed in advance, but can prove problematic if a person needs cash as soon as possible, for example on Christmas Eve. This is where Christmas loans are useful because they generally boast attractive terms and conditions and a quick pay-out regardless of the time and date.
What are the Terms & Conditions of Christmas Loans?
On average the majority of Christmas loans offer a loan pay-out of anything up to £1000. Most Christmas loans need no guarantors, can be decided via a quick online application and usually pay out in as little as 15 minutes. Annual percentage rate (APR) on Christmas loans averages 49.9% meaning that over the course of a year you can expect to pay back the full loan amount in addition to a further 50% of the loan. Christmas loan interest rates more often than not hover around 100%, with the maximum loan repayment term averaging 36 months.
Should you apply for a Christmas Loan?
Christmas loans are there to help those who have no other means of paying for Christmas. They serve an ever increasing number of individuals who need quick cash to pay for Christmas presents and that all important Christmas dinner. Only you know if this type of loan will suit your needs. Be mindful that while Christmas loans can give you breathing room over Christmas, their short repayment terms and high interest rates mean that you must be in a position to repay the loan relatively quickly in the new year. Other things to look out for when it comes to Christmas loans include:
- Ensuring that the loan company issuing the Christmas loan is authorised by the Financial Conduct Authority. If not the loan company might be a rogue scamming company that could steal your private information, or change the terms of the Christmas loan once you've received it in much the same way as a loan shark.
- Ensuring that the loan company will pay the Christmas loan into your bank account. Some loan companies will insist on sending 'reps' to your house to give you the loan in person. Again this is often the tell-tale sign of a rogue loan company, who will often use these so-called 'reps' to harass, bully and intimidate you into increasing the loan amount along with the APR and interest rate percentages.
- Ensuring that you meet the requirements of the Christmas loan, for example that you have 'disposable income' in which to start making timely repayments.