Need extra cash for Christmas? Consider a personal loan...
With Christmas just around the corner, maybe you're starting to wonder how your finances will cope.
A lot of people cover festive costs by loading up their credit card, planning to repay their spending over the year. This can be very expensive though, and it's not always as easy to repay your credit card balances as quickly as you'd like.
Others use their overdraft facility at their bank, but there are problems with this too: overdrafts often have a high interest rate, even higher than cards in some cases. This makes an overdraft an expensive choice for credit. Also, by using up your overdraft, you're losing an important financial 'buffer zone' which you might need if you face an unexpected expense in the new year.
So what's the alternative?
Another way of spreading the cost of Christmas is to take out a personal loan. This has several advantages:
- Cheaper: - A personal loan will normally have a lower rate than a credit card or an overdraft, which means your repayments will be smaller or you can repay the debt quicker
- Fixed Rate: - Most loans are 'fixed rate'. This means that you know exactly how much your repayments are going to be, and this will not change from month to month. Credit card and overdraft rates can change fairly often, leading to uncertainty in your budget.
- Fixed Term: - If you borrow on a card or overdraft, it can be tempting to let your repayments slide, and spend longer repaying than you need to. With a personal loan you'll know exactly how long it'll take to clear the debt.
When should I take out a loan?
It's most effective to take out a loan as we get nearer towards Christmas, or whenever you plan to start your shopping. With ADM's fast approval times you won't be left hanging around for a decision.
Even if you've missed out on applying before Christmas, or even quite close to it, you can help to beat the January blues by using a loan to pay off those depressingly high card balances and overdrafts.