Personal Loans

The Best Christmas Loans For 2020

Getting a Christmas loan to pay for holiday expenses is obviously not ideal. It’s better to budget for holiday expenses and save ahead of time. However, life can sometimes get in the way of the best-laid plans. This Christmas loans guide includes everything you need to know to make a smart choice on your next holiday loan.

The average American will spend about $1,000 on gifts during this Christmas (source). That doesn’t include the cost of parties, decorations, or travel. In total Americans will spend around $1 trillion on holiday spending this year.

Needless to say, not everybody has the savings to pay for Christmas expenses, especially when there is a big family or a large group of close friends to consider. In fact, one in two Americans doesn’t have $1,000 in savings. And according to the latest Report on the Economic Well-Being of U.S. Households, 40% of Americans wouldn’t be able to even cover a $400 emergency.

Not surprisingly, many Americans resort to a Chrismas loan.

What is a Christmas loan?

Christmas loans, also known as holiday loans, are really just a marketing term. They are personal loans marketed to people who want to finance purchases during the holiday season. As with any personal loan, your rates, terms, and available loan amounts will vary according to your income and credit.

Christmas loan terms

They may be designed to finance a short-term need, but Christmas loans are not typically short-term loans. Terms usually range from 1 to 5 years. Although it is nice to have several months to repay the loan, taking several years to repay the cost of a single Christmas is not a good idea. So it is best to find Christmas loans that allow you to repay the loan early without paying penalty fees.

Christmas loan interest rates

Christmas loans also tend to have lower interest rates than credit cards. The latest data from the Federal Reserve puts the average interest for a 2-year personal loan at 10.06%. Compare that with the average interest rate for credit cards (16.97%) and the three-digit interest rates you can expect to pay with a payday or cash advance loan.

The best Christmas loans for 2020

Whenever possible, avoid getting into debt to pay for holiday expenses. However, if you’ve decided you need a Christmas loan, it is important to shop around and find the best rates possible. Where do you begin?

Follow these steps when applying for Christmas loans:

  • Decide how much you need to borrow.
  • Find out what your credit score is.
  • Apply with multiple lenders that offer pre-approvals without a hard pull on your credit.
  • Check your offers and choose the loan with the lowest rates and shortest terms you can afford.
  • Complete an application form.

SuperMoney’s loan offer engine makes it easy to compare rates, terms, and fees. With a single form, you can find out what rates and terms you qualify for and what your monthly payments will be.

Here are some examples of the best Christmas loans for people with good to excellent credit.

1.) LendingClub

If you have excellent credit, LendingClub offers low interest rates. But if your credit is less than stellar, you may still get approved. The biggest drawback to LendingClub is that it charges an origination fee of 1% to 6% of your loan amount. The origination fee is deducted from your loan amount so keep this in mind when deciding how much you need to borrow.

Key benefits of LendingClub’s marketplace include fixed-rate loans and joint applications.

2.) Upgrade

Most personal loan companies offer high minimums on their personal loan. But if you don’t need $5,000, it doesn’t make sense to borrow that much. With Upgrade, personal loans start at $1,000. Also, you’ll get your money within a day of finishing the application and verification process.

Upgrade offers decent fixed interest rates for people with excellent, good, and fair credit. But like LendingClub, it charges an origination fee of 1% to 6% of your loan amount.

3.) Best Egg

Best Egg is a good option for borrowers looking for a fast loan application process, forgiving eligibility criteria, and great customer service. On the downside, they do charge an origination fee.

The best Christmas loans for bad credit

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 loans to address your cash needs. There are the three best Christmas loans for bad credit.

There are lenders out there who offer regular personal loans to people with subpar credit:

1) Avant

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.

2) OppLoans

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.

3) NetCredit

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. Borrowing from friends and family can get awkward, 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.

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. Make 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.

You can get a free copy of your credit report from each of the three credit bureaus at

FAQ on Holiday Loans

What are holiday loans?

A holiday loan is simply a personal loan issued by a financial institution, like an online lender, bank or credit union, that is used to finance holiday expenses. 

How do holiday loans work?

Holiday loans are primarily taken in the form of an unsecured loan. Many people pay for their holiday on a credit card as it often provides insurance. This means that if the holiday company folds, you’ll get your money back. However, credit cards often charge much higher interest rates than holiday loans.

How can I get a holiday loan?

  1. Check your credit score with the credit bureaus to be sure you can qualify.
  2. Shop the banks, credit unions, and P2P platforms for the best deals on holiday loans.
  3. Keep these factors in mind: Interest rate, fees, APR, and any prepayment penalties.
  4. Ask about the term of the loan.

What are the best holiday loans?

Here are some of the best holiday loans. OppLoans, Avant, NetCredit, RISE, Jora Credit, CashCentral and CashNetUSA.

What do you need to qualify for holiday loans?

Typical minimum requirements for a personal loan include being a U.S. citizen or permanent resident, being at least 18 years of age, and having a low debt-to-income ratio. Your credit score may also impact your ability to get a personal loan. While it’s possible to get a personal loan with a low FICO score, the best loan rates and terms go to those with good or excellent credit.

Find the best holiday loan

As you work through your options, including the aforementioned holiday loans, choose the one that works best for you and your needs.

Don’t ignore the cost, though, and make sure you pick one that won’t keep you in debt longer than necessary.

But before you make any decisions, take the time to do your research—you’ll be glad you did.

Get preapproved loan offers in seconds and compare leading lenders side-by-side.