Christmas Loans: How & Where to Borrow Money for Christmas

The Christmas season can be an expensive time of year. Almost everyone who celebrates will face expenses ranging from presents to holiday meals to traveling to see friends and family.

According to RetailMeNot, Americans expect to spend around $932 for the 2023 Christmas season, a 29% increase from 2022’s average of $725. Of the $932, they expect $732 to revolve around gifts. 

Many lenders offer Christmas loans, but some are better than others. This guide can help you find the best Christmas loans and determine what kind of financing is right for you. 

What is a Christmas loan?

Christmas loans are personal loans, which means you can use the funds from a Christmas loan for almost any purpose you’d like. In your research, you may have seen lenders also advertising holiday loans. A holiday loan is the same as a Christmas loan but marketed differently.

You can get Christmas loans through many lenders, from brick-and-mortar banks and credit unions to online lenders. They can be a terrific option for borrowers due to lower interest rates, wide availability, no collateral requirements, and flexible credit score conditions.

When it comes to Christmas loans, some lenders offer fair financing, but others have more predatory motives. Personal loans tend to be a solid option since they offer fair rates and can be used for just about anything. 

Can I get a Christmas loan with bad credit?

Your credit score and history affect the interest rate you get on a loan product. The lower the score, the higher the interest rate because lenders think borrowers with lower scores are more likely to default on payments. A bad credit score is often considered anything below 670 using the FICO scoring method.

Sometimes, a low credit score can affect your ability to qualify for a loan, but many low-credit lenders are on the market. Lenders that work with subprime borrowers typically charge high interest rates and offer lower loan amounts.

Top lenders when you need a loan for Christmas

The right lender for you will depend on your current credit situation. Check out the lenders below, and make sure you meet their eligibility requirements before applying.

You can click the lender’s name in the table to jump to our write-up on its Christmas loan.

Lender	Minimum credit score	Rates (APR)
Upgrade	660+	7.49% – 25.49%	View rates
Upstart	Varies by lender	5.20% – 35.99%	View rates
Credible	Varies by lender	5.20% – 35.99%	View rates
Achieve	640+	11.25% – 24.50%	View rates
LendingPoint	Not disclosed	9.99% – 35.99%	View rates

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Upgrade – Best for fair credit

View Rates

Editorial rating: 4.9 out of 5

• Rates (APR): 8.49% – 35.99%
• Loan amounts: $1,000 – $50,000
• Credit score: 580+

Upgrade’s eligibility requirements are based more on free cash flow compared to other lenders. Plus, get several funding options, so you can choose how much you want to borrow based on monthly payments and total cost. 

Upgrade loans can be a terrific option during Christmas for borrowers seeking smaller loan amounts who have bad or fair credit. And unlike many other lenders, you can apply with a co-borrower if that helps you qualify. 

• Credit score category: Fair, bad
• Soft credit pull to check rates? Yes
• Deposit time: As soon as the next day
• Origination fee: 1.85% – 9.99%
• Repayment terms: 24 – 84 months

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Upstart – Best for thin (little to no) credit

View Rates

Editorial rating: 4.8 out of 5

• Rates (APR): 5.20% – 35.99%
• Loan amounts: $1,000 – $50,000
• Credit score: 580+

Upstart is another solid option for borrowers with fair or bad credit. The company leverages AI and machine learning to automate the borrowing process. This direct-to-consumer lending platform provides a low minimum loan amount. So if you just want a little extra cash to buffer your holiday budget, you don’t need to borrow more than you need. 

Upstart offers a 15-day grace period for payments.It won’t charge late fees until that time frame expires.

• Credit score category: Fair, bad
• Soft credit pull to check rates? Yes
• Deposit time: As fast as one business day
• Origination fee: 0% – 12%
• Repayment terms: 36 or 60 months

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Credible – Best marketplace

View Rates

Editorial rating: 5.0 out of 5

• Rates (APR): 5.20% – 35.99%
• Loan amounts: $600 – $200,000
• Credit score: Varies

Credible is a loan marketplace. You fill out an application with no fees or hard credit checks and see prequalified rates from multiple lenders¹.

Its service is an excellent choice for borrowers considering applying with multiple lenders to see which may offer the best rate. Depending on the lender and your credit score, you can borrow as much as $200,000—but you likely won’t want to spend that much on Christmas! 

• Credit score category: Good
• Soft credit pull to check rates? Yes
• Deposit time: 1 – 7 days
• Origination fee: 1% – 10%
• Repayment terms: 2 – 7 years

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Achieve – Best for choosing payment date

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Editorial rating: 4.8 out of 5

• Rates (APR): 7.99% – 35.99%
• Loan amounts: $5,000 – $50,000
• Credit score: 620+

Achieve is terrific for borrowers who want to plan their payments around their budget after the holidays. The lender allows you to choose your payment date before you begin repayment. It can deliver personal loans within 72 hours.

You can qualify for a rate discount with Achieve in three ways to keep your Christmas loan as affordable as possible: Enroll in direct pay, apply with a qualified co-borrower, or show proof of retirement funds to earn a lower rate.

• Credit score category: Fair
• Soft credit pull to check rates? Yes
• Deposit time: 24 – 72 hours
• Origination fee: 1.99% – 6.99%
• Repayment terms: 24 – 60 months

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LendingPoint – Best for changing your payment date

View Rates

Editorial rating: 4.9 out of 5

• Rates (APR): 9.99% – 35.99%
• Loan amounts: $2,000 – $36,500
• Credit score: Not disclosed

Apply with LendingPoint, and you’ll be amazed at how fast you get a decision on your application because LendingPoint is a financial technology (fintech) company that uses AI for all approvals. 

LendingPoint also helps you manage your Christmas spending with several built-in personal finance tools. You can track your transactions and monitor your credit score within the app, so you stay on top of your budget and overall financial health throughout the season. 

• Credit score category: Bad, fair
• Soft credit pull to check rates? Yes
• Deposit time: As soon as next business day
• Origination fee: 0% – 8%
• Repayment terms: 24 – 72 months

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Is taking out a Christmas loan a wise idea?

Whether a Christmas loan is a good idea depends on your unique situation. Consider these pros and cons before applying:

Pros

• Helps fund all your Christmas spending

• May get a better interest rate than using credit cards

• Can use the funds for other expenses

• No collateral required

• Fast loan disbursement

• Fixed monthly payments

Cons

• Christmas expenses are nonessential debt

• May lower your credit score

• May have a higher monthly payment than a credit card minimum payment

• May have a loan origination fee 

Traps to avoid when borrowing money for Christmas

Some forms of Christmas financing are dangerous to your finances and more expensive than they’re worth. If you plan to take on debt for the holiday, avoid payday loans, car title loans, and store credit cards.

Financial trap	What to choose instead
Payday loan	Personal loan
Car title loan	Personal loan, home equity loan, or home equity line of credit
Store credit cards	0% intro APR credit card
High-interest credit card	Personal loan
Pawnshop loan	Bad-credit personal loan

What additional options might a borrower have? Our expert’s take

Erin Kinkade

CFP®

I would recommend borrowing money from a trusted friend or family member who understands your financial condition, or they may offer to give the funds to you. This is not an option for many people, but for those who find themselves in a precarious financial situation and have trusted individuals in their life with the funds to gift, it would be a terrific way to fund the holidays in a pinch without incurring debt and other associated fees, including a hit to your credit score. The other option I would suggest is contributing to a designated “gifts and holidays” savings account on a monthly basis. This may not be an option for many, so in the case of needing money during the holidays, a personal loan or credit card is the way to go. (I say “need” in the sense that this is an important time of year for the individual, and the pros of borrowing far outweigh the cons.) Just make a proactive repayment plan for when the holidays are over. Also, because gift-giving isn’t a true need, you can let family and friends know gift-giving isn’t in the budget this year. It’s OK to say that to your loved ones—you might even inspire somebody to do the same!

Payday Christmas loans

Payday loans, or cash advances, are short-term loans that come with fees and interest rates of around 400% or higher. These loans can trap you in debt because they’re so expensive, they can force borrowers to extend the loan—and fees—repeatedly. 

What to choose instead: Look for a personal loan from a bank, credit union, or online lender with flexible credit requirements and quick funding. Rates vary based on your credit history, but those with good or fair credit should look for interest rates around 6% to 15%. 

Car title loans

Auto title loans are a form of payday loan that uses your vehicle as collateral. They’re secured, but they can still come with high interest and fees—and you put the ownership of your car on the line.

What to choose instead: If you need a secured loan, a home equity loan or home equity line of credit may offer you better terms. To keep your important assets safe and keep your borrowing low, though, an unsecured personal loan is your best option.

Store credit cards

Stores often try to get you to sign up for branded credit cards during the Christmas shopping season. You may even get a discount if you sign up. These often come with high interest rates, poor rewards, and limited spending options outside the store. 

What to choose instead: If you need to use a credit card, look for one offering a 0% promotional APR. If you can pay off the balance before the promotional period ends, you’ll finance your Christmas spending at no added cost. And you might even be able to earn credit card rewards or a signup bonus while doing it.

High-interest credit card

A credit card may come with points and a high credit limit, but if it has a high interest rate and you can’t pay it off in full each month, you may find yourself making minimum payments, which can create lingering debt that eats into your monthly funds.

What to choose instead: Personal loans often come with much better interest rates than high-interest credit cards, so you’ll pay less to borrow the same amount of funds. They also come with set payment terms, so you have a finish line in sight.

Pawnshop loan

Subprime borrowers sometimes turn to pawnshop loans, which don’t check credit scores. If you don’t have a car or house, you can use any number of items to secure a pawnshop loan. But these types of loans often charge sky-high interest rates for small loan amounts and short repayment periods. Plus, if you fail to pay off the loan in time, you could lose the collateral you used to secure the loan. 

What to choose instead: Several bad-credit personal lenders exist. The interest rate may still be high, but you won’t risk any prized possessions, and you should be able to choose a repayment term with a monthly payment you can manage.

Alternatives to Christmas loans for next year 

If you need to take out a Christmas loan, consider taking the following steps after the holidays so you can avoid doing the same next year.

1. Set a Christmas budget (as early as possible)

Budgeting for Christmas can help you control your expenses. Ideally, you’ll start saving early and be able to cover the costs with cash and, if you expect one, a Christmas bonus.

If you must borrow, plan to repay your debt within around six months of the holiday, at most. 

If your planned expenses take a full year to pay off, it’s easy to be in the same situation next year. And if you need to borrow again, you’ll constantly find yourself paying off Christmas debt. 

2. Decide which traditions to keep and which to let go

You may be tempted to keep every tradition alive forever, but consider your Christmas expenses and see whether you can do without any of them. 

Perhaps you could switch to a gift swap with one family member instead of buying for everyone, or opt to stay in and rent a movie rather than take everyone to the theatre to see the year’s big release. Lower costs will mean less debt. 

3. Create a Christmas savings account

Christmas-specific savings accounts can come with decent interest rates. Some require the account holder to withdraw funds by a specific date, such as October 31, but not all do. If this intrigues you, look around for an account with a good annual percentage yield (APY). Contribute what you can each month, and watch your savings grow.

4. Purchase a CD

You can buy a certificate of deposit (CD) for just about any term you want. For Christmas, you might look at a six- to 10-month CD. If you purchased an eight-month CD for $500 with a 3.15% APR, for example, that $500 would grow to $640.80. And you might be able to find banks and credit unions offering even higher rates. 

5. Consider a part-time job or entrepreneurial gig

If you have a teachable skill, there are many online platforms where you can teach from the comfort of your home. Or perhaps you could make something to sell on Etsy or other similar platforms. 

6. Christmas exchange/Secret Santa

If you’re worried about Christmas expenses, chances are you’re not the only one in your inner circle with these concerns. Don’t be afraid to break the ice and suggest a Christmas exchange or Secret Santa. Christmas exchanges can be quite fun and encourage you to appreciate the best things about the holiday season: family and fellowship. 

7. DIY

A thoughtful gift made with love can be much better than what you’ll find in a store. You can still buy gifts for your immediate loved ones, but consider using the DIY approach for extended friends and family to help cut your Christmas expenses.

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