Should You Get a Personal Loan for the Holiday Season?

Americans love spending money around the holidays to purchase gifts for family and friends. On average, American consumers spend $800 on holiday gifts, but others even exceed $1,000. It’s a good idea to save up a few months before, but people on tight budgets may find saving quite challenging.

For those strapped for cash, getting a loan or other options allows them to pay their holiday purchases in monthly repayments after the season. But before you do that, there are some things you need to consider.

Why Consider a Personal Loan

A personal loan is your best option if you want a big, one-time expense for a wedding, home improvement, medical procedure, debt consolidation, or a financial emergency. They’re generally unsecured, but several lenders require collateral from borrowers with bad credit.

As soon as you get approved, you’ll receive a significant amount of money and repay the loan in fixed installments monthly. Most personal loans are payable for several years, meaning you could end up still paying for the personal loan you took for the last holiday around the same season.

Personal loans can also impact your credit score since repaying helps build good credit. If you don’t have any other installment loans, you can also improve your credit mix. However, if you miss or make late repayments, you will only harm your credit score, making you risky for future lenders.

So, before getting a personal loan, it’s best to consider the following alternatives:

1. Get a Zero Percent APR Credit Card

Some credit card companies offer an introductory period of zero percent interest, allowing the cardholder to carry a balance without interest from a few months to a year.

You could try qualifying for a zero percent interest rate on a credit card and use it for your holiday purchases. You can then take the next months to pay it off. Just be sure to pay off your entire purchase before your regular APR kicks in.

2. Save Early

If you get a personal loan, you could end up paying it back for months or years. So if you’d rather avoid that, you can begin saving money each month, and when the holidays arrive, use it as shopping money.

Doing this means you’ll need to set a budget and cut back on spending so you can accomplish your target savings. This will be the better choice if you don’t want to worry about holiday debt next year.

3. Make Your Own Gifts

There are ways around giving gifts in the holiday season without spending too much, that’s if you don’t want to be indebted as the new year comes. For instance, you can make handmade gifts or offer acts of service to family and friends.

You may also choose to make a small donation to a nonprofit organization your family cares about or give your friend a book you love, instantly sharing a bond that you could talk about in the holidays.


There are many ways around spending a fortune come holiday season. Sometimes, it’s best to save up or just avoid spending too much if it’ll only end you up indebted in personal loans. Still, if a loan seems like the best option to you, many lenders also offer flexible repayments to borrowers.

Shelby Finance Company offers installment loans and ,personal loans in Memphis, TN to individuals looking for ethical lending practices and personal service. We value our customers’ trust and privacy so you can count on our team for reliable financial help. We also practice never to turn an applicant away, so we give equal chances to all inquiries. Get in touch with us today and let us know how we can help!