The winter holidays are, for most individuals, the best part of the season. However, they can also be extremely stressful, especially on a financial level. Most retailers compete in terms of discounts and product offers, in an attempt to convince customers to make more expensive purchases.
While most of the deals offered during the winter holidays are worth taking into consideration, some items may still be out of the reach of customers. A commonly used solution to this issue is to borrow money. The downside with this is that it is easy to borrow more than one can repay and end up with a considerable amount of debt once December passes. This having been said, here are the best ways to borrow money for gifts. Please keep in mind that these have been chosen to make the debt as easy to manage as possible:
- Get an Unsecured Personal Loan
Getting a loan from a bank is, in many ways, the most accessible to borrow money. Personal loans do not come with any restrictions in terms of what the borrower can do with the money and have a relatively low interest rate. Furthermore, it can be a great alternative to instalment purchases. Most individuals tend to get multiple expensive products such as laptops and game consoles and pay for each of them in instalments.
This type of debt is not only difficult to manage; it can also be extremely expensive when compared to what an individual would pay for a single personal loan. However, it is important to make sure that you take out a single personal loan, that it is unsecured, and that it has a high enough value to cover all of the gift purchases.
- Use a P2P Platform to Borrow Smaller Amounts of Money
Overusing bank products and services in a short amount of time may reduce your credit rating, which makes it important to look for alternative lenders, preferably ones that do not report their activity to any of the main credit reference agencies in the country.
P2P lending platforms are great alternatives to banks. Using them will not lower your credit rating, they do not perform a credit score check in order to decide who is eligible or not, and getting an online loan usually takes under 72 hours.
- Use Online Lending Services for Microloans
Tens of websites offer users the possibility to get microloans. The terms and conditions for these are similar to payday advances and it usually takes under 24 hours to get one, making them great for most gifts.
- Replace Your Credit Cards with Smartphone Lending Apps
Using your credit card too often is a sure way to reduce your credit rating and to end up with an expensive debt that needs to be repaid before the month ends. Luckily, there is an alternative to credit cards, in the form of lending apps. These allow individuals to pay for products using NFC-enabled smartphones and the money can be set to be automatically repaid after a certain period.
Again, using these apps does not affect your credit file and the requirements to borrow money are simple. Users will only need to submit proof of address, proof of identity, proof of income, and a bank account statement.
Regardless of what method you intend to use, keep in mind that most lenders come up with great offers during the first weeks of December. If you want to borrow money and use it during the winter holidays, do not submit loan applications until after these new deals have been advertised.