The holidays are right around the corner. Spending around the holidays tends to increase as you’re buying gifts, traveling to be with your family and even spending for your holiday meals. Holiday shopping for many people can be expensive, and determining how to pay for everything can be stressful. One option is taking out a personal loan. Personal loans have several advantages as long as you make sure the monthly payments fit in to your budget.
- You can borrow just the amount that you need. Many lenders offer holiday loan specials allowing you to borrow smaller amounts to cover just your holiday spending needs.
- Personal loans may have lower interest rates compared to credit cards. Personal loan APRs average 9.58% according to the Fed’s most recent data while the average credit card interest rate is around 16.30%.
- Repayment options can be over longer periods of time. A longer term usually means smaller monthly payments to fit in to your monthly budget easier.
- Loan application, processing, closing and funds disbursement is a quick process. Many lenders can get you funded the same day or next day after you’ve been approved. Just make sure you provide complete and accurate information on your application to avoid any delays.
- A personal loan could increase your credit score. Taking on a personal loan can help improve your credit mix. Your credit mix refers to the different types of credit accounts you have, including credit cards, loans, mortgages, etc., and it makes up 10% of your credit score. It’s not necessary to have one of each type of account, but having a variety of accounts can show lenders that you can manage multiple types of credit.
If you are unsure how to pay for your holiday expenses this year, consider taking out a personal loan. Minnesota First is offering a holiday loan special until December 31, 2023. You can borrow $3500.00 at 9.25% Annual Percentage Rate for 30 months with payments as low as $134.00 per month. Contact us today to apply or get more information!