Holiday Loans: Online Lenders & Borrowing Advice

The holidays are a highly anticipated time of the year for many people, but they certainly aren’t cheap. If you live away from your family, you may have travel costs to shoulder on top of entertainment costs and gifts.

A lot of lenders could offer you an infusion of cash for the holidays. But some holiday finance options are better than others. This guide will cover some personal loans for holiday expenses, and how to determine whether they’re a good option for you.

In this guide:

• Holiday loans
• What is a holiday loan?
• Is taking out a holiday loan a good idea?
• 3 tips for holiday financing

Holiday loans

The right lender for you depends on your financial status and what you need. With that in mind, we’ve highlighted some personal loans for the holidays based on borrower credit scores.

Upgrade

View Rates

Rates (APR)

7.99% – 35.97%

Loan Amounts

$1,000 – $35,000

Credit Score

620+

Upgrade offers loans to borrowers with low-to-fair credit scores, and you can check your interest rate on the company’s website without affecting your score. Loans amounts start at $1,000, coming in handy for the holidays.

• Credit score category: Fair, bad
• Soft credit pull to check rates: Yes
• Deposit time: As soon as the next day
• Origination fee: 2.9% – 8%
• Late fee: $10
• Repayment terms: 36 or 60 months

Upstart

View Rates

Rates (APR)

8.41% – 35.99%¹

Loan Amounts

$1,000 – $50,000²

Credit Score

600+

Upstart is an online lending platform that partners with banks to provide personal loans that can be used for almost anything. Upstart’s lending model considers education, employment, and many other variables when determining eligibility.³ This model leads to 27% more approvals and 16% lower rates than traditional models.⁴

• Credit score category: Fair, bad
• Soft credit pull to check rates: Yes
• Deposit time: As fast as one business day
• Origination fee: 0% – 8%
• Late fee: $15 or 5% of payment
• Repayment terms: 36 or 60 months

For additional options, check out our guide to the best personal loans.

What is a holiday loan?

You might not see the term “holiday loan” on a lender’s site—but you could still get such a loan from that lender. Holiday loans are simply personal loans from online lenders, banks, and credit unions. 

Because borrowers can use personal loans for almost anything, you could earmark it to spread out holiday expenses across a repayment term of a few months or years.

Personal loans fulfill this need because of their versatility, and also because you’ll often receive the funds quickly and get a low interest rate relative to other holiday financing options.

Is taking out a holiday loan a good idea?

You should always be cautious before taking on debt. But if you want to finance a vacation or holiday gifts for Christmas, it may not be a question of if you will borrow, but how. Our annual surveys found the average American expected to spend $186.05 on Thanksgiving and $633 on Christmas in 2018.

To be smart about borrowing, be leery of predatory payday lenders that promise cash loans without a credit check. These loans may seem like the answer to your prayers, but they often have sky-high interest rates and a lot of hidden fees.

Another option, financing your holiday purchases on a credit card, can damage your credit score and cost you in high interest.

Each of the lenders we featured above offers unsecured personal loans with low or no fees. Personal loans also tend to have lower interest rates than what you’d get with other financing options, which will keep your total holiday costs down over time.

3 tips for holiday financing

To avoid taking on debt or at least reduce the amount of debt you take on, consider these tips as you prepare for your holiday expenses. 

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

When you set a budget, consider your income and expenses. Don’t overextend yourself and cause a financial hole you can’t get out of. Consider how much you can afford in a monthly payment to determine how much to borrow for the holidays. 

Try to also accommodate building your savings account into your budget to avoid taking out a holiday loan next year. You could even try creating separate checking accounts and depositing a little money into a holiday account to prep for holiday spending throughout the year.

2. Look for ways to trim expenses

It’s not fun to watch your wallet during the holidays, but it can save you a lot of stress once the holiday glow wears off, and you’re stuck with all that money to repay. 

Take a hard look at your holiday expenses to figure out what you could cut. Can you put a cap on gift-giving? Find cheaper travel? Attend fewer parties? Convince your office to skip a gift exchange this year?

3. Avoid holiday financing traps

Be a smart shopper this holiday season by watching out for these expensive forms of financing. 

Payday or cash loans

Payday loans come with high interest rates and can have a lot of hidden fees. It’s best to avoid this kind of holiday loan unless you have absolutely no other choice. 

What to choose instead: Better loan options than a payday loan include personal loans from a bank, credit union, or online lender. Your rate will vary based on your credit score, but some bad credit loans exist. Look for interest rates between 5% and 15% if you have good-to-fair credit and 15% to 30% if your credit is poor. 

Store cards

Getting a branded credit card from your favorite store may seem appealing around the holidays, but they aren’t usually a good deal. You can’t use many of them outside of that store, and they often have high interest rates and poor rewards. 

What to choose instead: If you get a credit card, look for one with a 0% APR introductory offer. This can help you finance your holiday spending for free and earn points or sign-up bonuses while doing it. Just plan to pay off your purchases before the introductory offer expires.

¹The full range of available rates varies by state. The average 3-year loan offered across all lenders using the Upstart platform will have an APR of 21.97% and 36 monthly payments of $35 per $1,000 borrowed. For example, the total cost of a $10,000 loan would be $12,646 including a $626 origination fee. APR is calculated based on 3-year rates offered in the last 1 month. There is no down payment and no prepayment penalty. Your APR will be determined based on your credit, income, and certain other information provided in your loan application.

²Your loan amount will be determined based on your credit, income, and certain other information provided in your loan application. Not all applicants will qualify for the full amount. Loans are not available in West Virginia or Iowa. The minimum loan amount in MA is $7,000. The minimum loan amount in Ohio is $6,000. The minimum loan amount in NM is $5100. The minimum loan amount in GA is $3,100.

³Although educational information is collected as part of Upstart’s rate check process, neither Upstart nor its bank partners have a minimum educational attainment requirement in order to be eligible for a loan.

⁴Approval numbers compare the 2020 loan approval rate by the Upstart model and a hypothetical traditional credit decision model. The APR calculation compares the two models based on the average APR offered to borrowers up to the same approval rate. The hypothetical traditional model used in Upstart’s analyses was developed in connection with the CFPB No Action Letter access-to-credit testing program, is trained on Upstart platform data, uses logistic regression and considers traditional application and credit file variables.