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Christmas loans when you have bad credit

Thu 07 November 2019

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Christmas is a time for joy and celebrating. However, it can also be a time of great financial strain for many families. Extra expenses arise from all angles. From stocking up on food and drink, buying gifts for loved ones, and Secret Santa fun at work, your bank account can take a big hit towards the end of the year. The holidays are coming, and with it comes a lot of expense.

In an ideal world, we would plan carefully throughout the year to get ahead and spread out the cost across several months, but this is not always possible or realistic. With December approaching, you may be wondering if you can get some extra financial help this year to cover the costs of Christmas. It may be more difficult to land a loan with bad credit, but it could still be an option. Doing thorough research will help you decide whether a loan is right for you.

How having bad credit may affect you

It is not impossible to get a loan with bad credit. In fact, some loans are created specifically for people with a bad credit history. However, there may be a few differences in the type of loan you are offered.

You may find companies are willing to offer you a smaller amount than they would if you had good credit history. They may also offer you a loan with higher fees and interest rates than average, making borrowing more expensive. This is because they deem you a higher risk.

Sending out too many loan applications will damage your credit history further, so research to find the right deal before you start applying.

Guarantor loans

One option for people with bad credit is to get a guarantor loan. This makes a second person liable for paying off the debts if the person with bad credit fails to make their repayments.

Having a guarantor may mean you can borrow a larger amount than with other ‘bad credit loans’. However, this does come with risks. Ensure you can afford the repayments every month, or your guarantor and their own credit report will suffer.

Secured loans

A secured loan is where you borrow money against one of your assets, such as your home. This gives the lender security that they will get reimbursed should you fail to make your loan repayments. This may be an option if other lenders won’t consider you with bad credit, as it gives them a form of protection.

However, the risks are that you could end up losing your home should you fail to pay, so do not choose this option unless you are certain you can afford the loan repayments, fees and interest.

Is a loan right for you?

If your bad credit history is due to late/missed repayments or taking out more money than you can afford to pay back, you may want to rethink whether a loan is a good idea. If you are already dealing with ongoing debt, another loan may make it worse.

Consider whether there are any other ways you can manage Christmas without taking out a loan. Planning your gifts for loved ones in advance, using coupons for food shopping and putting a spending limit on presents can stop you going overboard.

Top tips for Christmas loans

  • Only borrow a small amount that you know you can afford to pay back
  • Research the best deal before applying
  • Always read and understand the terms and conditions for your loan, including interest rates and fees
  • Stick to your payment plan

About Morses Club

At Morses Club, we specialise in small cash loans to help with unexpected expenses. We assess each application in person, based on your individual circumstances. In some cases, we can offer loans to those who have been refused credit from another lender. This isn’t guaranteed but, if you’ve been considering bad credit loans, then we may be able to help.

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