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What Is a Holiday Loan?

What Is a Holiday Loan?

By Matt Diehl • November 06, 2019

There are many reasons why the holiday season can be the most wonderful time of the year. However, between gifts, parties and traveling, the total cost can sometimes be too much for Ebenezer Scrooge’s bank account.

But don’t lose your spirit. If you need extra holiday cash, a holiday loan can help you enjoy the season and still keep your budget intact. Here are some details:

So, what exactly is a holiday loan?

A holiday loan is essentially a personal loan used for holiday expenses. Offered by most lenders, banks and credit unions, these loans are intended to help cover holiday costs but could also be used for other personal expenses. To be a smart borrower, it’s important to understand the options available. Some loans are unsecured, which means you don’t need to use collateral, while others are secured and require collateral such as a vehicle. The size of your loan, as well as your interest rate, can depend on many factors including your credit score and income.

What can a holiday loan be used for?

If you need it for the holidays, your loan can help cover the costs. Typical uses include:

  • Gifts
  • Travel
  • Hosting family
  • Social events

Why get a loan for the holidays?

The reasons vary per person, but it may come down to preparation. Common advice is to buy gifts throughout the year or start saving for the holiday season during summer. But not everyone has the extra income to put toward gifts or holiday travel. And if you try to buy everything within a month or two, you may have to dip into your savings or add debt to your credit cards. By getting a holiday loan, you can get one lump sum of money to pay for everything, avoid touching your savings account and credit cards, and spread out your loan payments over time.

Pros and cons of taking out a holiday loan

As with any financial decision, it’s important to consider the pros and cons of borrowing extra holiday cash. Here are some points to think through:


  • Less stress about money for the holidays
  • Credit card debt will not increase
  • Fixed interest rate and monthly payment


  • Potential for fees
  • Potential for high interest rate depending on your credit score
  • Car or boat might be needed as collateral

Tips for getting a holiday loan

If you’re ready to start searching for options, these tips can help you find the best terms and save money:

  • Shop around — Checking for offers at different lenders lets you compare interest rates and other factors. Some lenders may also let you find out if you’re prequalified for a loan.
  • Borrow only what you need — Be mindful of the amount you borrow. This can also help keep your monthly payment, repayment period and interest paid lower.
  • Don’t wait until the last minute — If possible, get your loan early in the season. This way you can take your time, hunt for sales and make smarter shopping decisions.

Give yourself peace of mind this year

The holidays are meant to be a time of joy and happiness. If a lack of funds is causing you stress, a holiday loan could be the answer to getting you back in the spirit of the season.

If you could use some ideas to make extra cash this season, check out these 7 Ways to Make Extra Money During the Holidays.

The information in this article is provided for general education and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness or fitness for any particular purpose. It is not intended to be and does not constitute financial, legal or any other advice specific to you the user or anyone else. The companies and individuals (other than OneMain Financial’s sponsored partners) referred to in this message are not sponsors of, do not endorse, and are not otherwise affiliated with OneMain Financial.