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Christmas Loans: How to Get One and Alternatives

A Christmas loan is one way to pay for expenses this time of year, but compare financing options to find the most affordable one.

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Updated · 4 min read
Chanell Alexander
Written by 
Writer
Kim Lowe
Edited by 
Head of Content, Personal & Student Loans
Ronita Choudhuri-Wade
Co-written by 
Lead Writer
With the holidays approaching, you may be wondering how you’re going to pay for gifts and other seasonal expenses. Holiday spending is expected to reach a record high in 2024 — about $900 per person — spread across gifts, decorations, food and more, according to the National Retail Federation.
Christmas loans (also called holidays loans) are one way to help cover these costs, but there may be cheaper options.
Learn about Christmas loans and compare alternatives before you borrow.

What is a Christmas loan?

A Christmas loan, or holiday loan, is an unsecured personal loan that can help cover holiday expenses, including gifts, trips or even parties. These loans range from $1,000 to $100,000 and have annual percentage rates from about 6% to 36%. They can get you cash quickly, too — some lenders can approve and fund a loan the same day you apply.
But because they typically have terms between one and seven years, you could still be paying for this season’s expenses when the holidays roll around next year — and possibly the year after.
» MORE: 6 ways to avoid a holiday spending hangover

How to get a Christmas loan

Christmas loans from online lenders

Online lenders offer Christmas loans to consumers with all types of credit scores, and they can fund a loan within a day or two after you apply. Loans from online lenders have APRs up to 36% and repayment terms from two to seven years. The rate you qualify for depends on your credit score, credit history, debt-to-income ratio and cash flow.
Personal loan rates from online lenders like LendingClub and SoFi can start around 9%, but you need good to excellent credit (a score of 690 or higher) to qualify for the lowest rates.
» MORE: Best online personal loans
Borrowers with fair or bad credit (scores below 690) can expect rates at the higher end of an online lender’s range, which means you'll pay more in interest. For example, a $1,000 loan, due in two years at an APR of 20.99%, will cost $233 in interest. The same loan with an APR of 35.99% will cost $417 in interest.
If an online loan is your best option, pre-qualify with multiple lenders to find the best rate, and make a plan to pay off your loan as soon as possible.
See if you pre-qualify for a personal loan – without affecting your credit score Just answer a few questions to get personalized rate estimates from multiple lenders.
on NerdWallet

Christmas loans from banks

Bank loans can have attractive rates and perks for existing customers, and most offer online applications. A personal loan from a bank can be a good idea if you have good or excellent credit and are an existing account holder. Not all banks offer personal loans, though, and some may only lend to existing customers.
Citibank provides loans to non-customers, but includes perks for existing account holders, like faster funding, while Wells Fargo offers a relationship discount to customers with qualifying checking accounts.
» MORE: Best bank loans

Christmas loans from credit unions

Credit union loans typically offer flexible terms, smaller loan amounts and lower average rates. Borrowers with fair or bad credit may find attractive rates compared with other lenders, as credit unions may consider factors beyond credit scores. However, only credit union members can apply for personal loans.
To become a member, you must meet the requirements and possibly open a bank account at the credit union with a small deposit (often as low as $5). This is usually a quick process you can complete online.
» COMPARE: Top credit unions for personal loans

Personal loans from our partners

SoFi
Check Rate

on SoFi

SoFi

5.0

NerdWallet rating
APR

8.99-35.49%

Loan Amount

$5K- $100K

Lightstream
Check Rate

on LightStream

LightStream

4.5

NerdWallet rating
APR

6.49-25.29%

Loan Amount

$5K- $100K

OneMain
Check Rate

on OneMain Financial

OneMain Financial

3.5

NerdWallet rating
APR

18.00-35.99%

Loan Amount

$1.5K- $20K

Upstart
Check Rate

on Upstart

Upstart

5.0

NerdWallet rating
APR

6.70-35.99%

Loan Amount

$1K- $50K

Avant
Check Rate

on Avant

Avant

4.0

NerdWallet rating
APR

9.95-35.99%

Loan Amount

$2K- $35K

Upgrade
Check Rate

on Upgrade

Upgrade

5.0

NerdWallet rating
APR

7.99-35.99%

Loan Amount

$1K- $50K

MORE QUICK CASH LOANS

Christmas loans for bad credit

One of your best bets for getting a Christmas loan with bad credit is to apply with an online lender that accepts borrowers with lower credit scores. These loans fund quickly — sometimes the same day you’re approved — and loan amounts start as low as $1,000.
COMPARE: Online lenders that offer bad-credit loans
But make sure to look for a reputable lender that checks your credit as part of the application. Many websites promising "Christmas loans" are actually offering payday loans in festive disguise. These lenders don’t check your credit, and your interest rate will be well into the triple digits. For example, a $500 loan due in two weeks that costs $15 for every $100 borrowed equals an APR of 391% – typical of payday loans.
With this type of loan, you’ll also have to pay back all the money, plus interest, in a few weeks or months. You may even have to let the lender access your bank account to collect payments, which leaves you vulnerable to overdrafts.
Avoid Christmas payday loans and stick to loans with a max APR of 36%.

More ways to pay for Christmas

Here are other options to help cover expenses during the holidays.

Buy now, pay later for the holidays

As you shop online or in stores this holiday season, you may see the option to “buy now, pay later” with providers like Affirm or Klarna. BNPL payment plans vary, but most offer “pay-in-four” plans that divide your purchase into four equal installments, each due two weeks apart, with the first payment due at checkout. These plans don’t charge interest.
Some BNPL providers also offer monthly payment plans with rates ranging from 0% to 36% and repayment periods from three months to five years.
While you may not pay interest with BNPL, many providers charge fees, including late fees.
BNPL financing is convenient, especially when it's a simple checkout option at online stores, but it can easily lead to overspending, so keep an eye on your budget.
» COMPARE: Best buy now, pay later apps

0% APR credit cards for the holidays

If you have good or excellent credit, you may qualify for a 0% APR credit card. You won’t be charged interest if you pay the balance within the card’s introductory period, typically 15 to 21 months.
A 0% credit card can be cheaper in the short term, but if you carry a balance after the promotional period, you'll pay interest on the amount going forward. If you miss a payment or pay late during the introductory period, the credit card issuer can cancel your 0% rate and charge the ongoing rate on the balance.
» COMPARE: Best 0% APR credit cards

Loan apps for the holidays

Loan apps like Earnin offer cash advances from your paycheck with no mandatory fees or interest. Most apps request an optional tip and charge fees for fast funding.
The amounts available from loan apps can be from about $10 to $750. The apps will automatically withdraw repayment from your bank account on your next payday. Typical funding time is one to five days, though some apps will deposit funds immediately for a fee.
Between fees and the optional tip, borrowing even $100 can equate to an APR of over 300% on an advance, so it's best to consider cheaper options if possible.
» COMPARE: Best cash advance apps

Compare holiday financing options

Option

Cost

Repayment term

Pros and cons

Personal loan

6% to 36% APR.

Typically 2 to 7 years.

  • Pro: Fast funding.

  • Con: APRs can be high for bad-credit borrowers.

Buy now, pay later

0% to 36% APR.

Varies from 6 weeks to 5 years.

  • Pro: Pay-in-four plans are interest-free.

  • Con: Potential for late fees and overspending.

0% APR credit card

0% APR introductory period; 16% to 30% regular APR.

15- to 21-month promotional period to avoid interest.

  • Pro: 0% interest during promotional period.

  • Con: Typically available only to good- and excellent-credit borrowers.

Loan apps

Optional fees for fast funding and tips vary.

Next payday.

  • Pro: Can receive funds instantly or same-day.

  • Con: Charges a fee for instant access.

Start budgeting for next year

To avoid having to borrow to cover holiday expenses, start planning early and use a budget (we recommend the 50/30/20 model) to get the most out of your paycheck. Saving even a small amount each payday throughout the year can be enough to give yourself the best gift: a debt-free holiday.
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Methodology

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How we chose the best personal loans

Our team of consumer lending experts follow an objective and robust methodology to rate lenders and pick the best.

35+

Lenders reviewed

We review over 35 lenders, including major banks, top credit unions, leading digital platforms, and high interest installment lenders operating across multiple states.

25+

Categories assessed

Each lender is evaluated across five weighted categories and 27 subcategories, covering affordability, eligibility, consumer experience, flexibility, and application process.

70+

Data points analyzed

Our team tracks and reassesses hundreds of data points annually, including APR ranges, fees, credit requirements, and borrower tools, ensuring up to date, accurate comparisons.

Star rating categories

We evaluate more categories than competitors and carefully weigh how each factor impacts your experience.

Affordability 25%

We review lenders’ annual percentage rate offerings at least twice per year and the competitiveness of each lenders’ APR range. We also assess whether a lender charges an origination fee and any opportunity for borrowers to receive a rate discount.

Customer experience 20%

We consider the experience of the consumer trying to manage a personal loan, which means accessibility of customer service representatives, whether borrowers can choose and change their payment due date, and the ability to track their loan on a mobile app.

Underwriting and eligibility 20%

We consider the rigorousness of each lender’s underwriting practices and how widely available their loans are. This category includes whether a lender does a hard credit check before providing a loan, the range of credit profiles they accept and how many states their loans are offered in.

Loan flexibility 20%

We assess how flexible lenders can be with borrowers, including whether they offer multiple loan types, personal loan amounts and repayment term options and whether they offer direct payment to creditors on debt consolidation loans.

Application process 15%

We consider the lender’s full application process, including a borrower’s ability to preview their loan offer via pre-qualification, whether basic loan information such as APR range and repayment terms are available and easy to find online and how quickly a loan can be funded after approval.

5.0
Overall score

NerdWallet’s review process evaluates and rates personal loan products from more than 35 financial technology companies and financial institutions. We collect over 70 data points and cross-check company websites, earnings reports and other public documents to confirm product details. We may also go through a lender’s pre-qualification flow and follow up with company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.

Our star ratings award points to lenders that offer consumer-friendly features, including: soft credit checks to pre-qualify, competitive interest rates and no fees, transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to credit bureaus and financial education. Our ratings award fewer points to lenders with practices that may make a loan difficult to repay on time, such as charging high annual percentage rates (above 36%), underwriting that does not adequately assess consumers’ ability to repay and lack of credit-building help. We also consider regulatory actions filed by agencies like the Consumer Financial Protection Bureau. We weigh these factors based on our assessment of which are the most important to consumers and how meaningfully they impact consumers’ experiences.

NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodologies for personal loans and our editorial guidelines.

Helpful resources

6 Steps to Personal Loan Pre-Qualification
Where to Get a Personal Loan
How to Get a Personal Loan in 7 Steps
6 Tips to Boost Your Chances of Personal Loan Approval
See if you pre-qualify for a personal loan – without affecting your credit score Just answer a few questions to get personalized rate estimates from multiple lenders.
on NerdWallet
Comparing options? See if you pre-qualify for a personal loan - without affecting your credit score Just answer a few questions to get personalized rate estimates from multiple lenders.
on NerdWallet

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