If you need some extra cash this Christmas, it can be hard to get it if you have bad credit. The good news is that you don’t need to resort to high-interest payday loans to address your cash needs. There are the three best Christmas loans for bad credit. There are some lenders out there who offer regular personal loans to people with subpar credit.
The best Christmas loans for bad credit
If you need a Christmas loan, it’s important to know where to go.
Here are a few of the top three options to consider:
With a minimum credit score of 580, Avant doesn’t have high expectations. Of course, this may mean that you’re paying a fairly high interest rate, but nowhere near as much as you’d pay on a payday loan.
See the most up-to-date Avant rates on our review page of the lender.
What’s more, Avant offers only unsecured personal loans, so you don’t need to worry about putting anything down as collateral. You can borrow between $1,000 and $35,000 and can choose a repayment term between 24 and 60 months.
Avant also allows you to pre-qualify for a loan, so you can get an idea of what the lender will offer before you officially apply. If you aren’t happy with the offer, this will prevent you from applying and getting an unnecessary hard inquiry on your credit report.
Just keep in mind that there is an administrative fee of 1.5% to 4.75% of the amount of the loan. This will likely get taken out of your loan proceeds upfront.
If your credit score doesn’t qualify you for Avant or OneMain Financial, OppLoans may be a good choice. The lender’s interest rates can go much higher than the other two lenders, but it’s still cheaper than a payday loan.
Check out our review page for the latest interest rates.
OppLoans’ minimum credit score is 500, and you can borrow between $500 and $5,000. You can take up to 36 months to repay the loan, depending on your loan terms. There is an origination fee on the loan, but it has a lower limit than the other two lenders, charging as much as 3% of the loan amount.
NetCredit is another lender that offers personal loans to people with bad credit but at a higher price. Its lowest rates are close to the highest rates for Avant and OneMain. That said, it accepts borrowers with credit scores as low as 500.
Check our review page for up-to-date rates.
Loan amounts range from $1,000 to $10,000 with NetCredit, and you can choose a repayment period between six months and five years. Surprisingly, NetCredit doesn’t charge an origination fee, which means you get the full amount that you borrow.
What to do before considering personal loans for Christmas
If you think you need a Christmas loan, take a step back and consider your options. For starters, if you have a good relationship with a loved one, you may be able to borrow some cash from them and pay it back without a high interest rate. This may not be ideal, but it can make things easier for you financially.
Also, make sure you have a budget for your Christmas shopping so that you know exactly how much money you need to borrow. If you ask for more than you actually need, it can leave extra cash burning a hole in your pocket.
Also, consider your full financial picture. If you’re struggling to make minimum payments on current debt, a new personal loan will only make things worse.
If you have some time, consider working to improve your credit score leading up to Christmas, or at least for next year. “Review your credit reports for accuracy, and correct any errors,” says Freddie Huynh, vice president of credit risk analytics with Freedom Financial Network.
You can get a free copy of your credit report from each of the three credit bureaus at AnnualCreditReport.com.
Huynh also recommends making sure you’re current on your monthly payments. “On-time payments are the most important factor in developing good credit, accounting for 35% of your FICO credit score,” he says.
The bottom line
Borrowing money should be your last resort for Christmas shopping. But if you’ve exhausted all of your other options, it’s important to know where you can go that won’t charge you as much as a payday loan.
Consider the lenders listed here, as well as other top personal loan companies.
You can even use SuperMoney’s loan engine to get pre-qualified with a soft credit check for multiple lenders at once. The more time and energy you put into finding the best loan option for you, the more you’ll save.