Christmas Loans

Applying for a loan will impact you way after the Christmas period is over. If you are borrowing money this holiday season make sure you Choose Wisely and get the right loan for you.

Table of contents

Written by Mark Grimley
Read time: ~5 mins
Published: 28th September 2023

What is a Christmas Loan?

A Christmas loan is a type of personal loan designed to provide you with the funds you need to cover holiday expenses. These loans are specifically tailored to help individuals who may have poor credit or limited credit history access flexible credit options.

How Do Christmas Loans Work?

Christmas loans are just another name for a traditional personal loan, they work exactly the same:

  • Eligibility Check: Start by completing an easy online application through Choose Wisely.
  • Loan Comparison: After submitting your application, our lending panel will assess your information and present you with personalised loan options. You'll have the opportunity to compare interest rates, repayment terms, and loan amounts.
  • Choose Wisely: Review the loan options and select the one that best suits your needs and financial circumstances. Remember to consider the total cost of borrowing, including any fees or additional charges.
  • Application Process: Once you've chosen a loan, you'll proceed with the lender's application process. This will involve a hard credit check and providing additional details, such as proof of income or identification.
  • Loan Approval: If your application is approved, the lender will typically transfer the funds directly to your bank account
  • Repayment: Repayments are usually made in fixed monthly instalments over a set term. Make sure to budget accordingly to ensure timely repayment.

How Can I Get a Christmas Loan?

To increase your chances of approval, follow these steps:

  • Prepare Your Information: Before applying, gather necessary information such as proof of address, income details, and identification documents.
  • Submit an Application: Use Choose Wisely's Eligibility Check service to complete a short application form. Provide accurate details to receive personalised loan options.
  • Compare Loan Options: Once you receive loan offers, take your time to compare interest rates, repayment terms, and any additional fees.
  • Choose a Suitable Loan: Select the loan option that aligns with your financial situation and preferences. Remember to consider affordability and repayment ability.
  • Apply with the Lender: Follow the lender's application process, providing any required documentation and information.
  • Receive the Funds: If approved, the funds will be transferred directly to your bank account, allowing you to start your Christmas shopping or cover any festive expenses.

Where Can I Get a Christmas Loan?

Choose Wisely provides you access to a wide lending panel that specialises in providing funding options for applicants in all circumstances.

How Much Can I Borrow with a Christmas Loan?

The amount you can borrow varies depending on factors such as your income, credit history, and the lender's criteria. Typically, loan amounts range from £500 to £5,000. Remember to borrow responsibly and only take out what you can comfortably afford to repay.

How Much Does a Christmas Loan Cost?

The cost of a loan includes the interest charged by the lender and any additional fees. The interest rate depends on your creditworthiness and the lender's criteria. It's essential to carefully review the terms and conditions of each loan offer to understand the total cost of borrowing. By comparing options through Choose Wisely, you can find the most affordable solution for your festive needs.

What Are the Pros and Cons of Christmas Loans?

Before deciding on a Christmas loan, it's important to weigh the advantages and disadvantages. Here's an overview:

  • Access to funds for holiday expenses, gifts, and celebrations.
  • Flexible repayment terms that suit your budget.
  • Possibility to improve your credit score by making timely repayments.
  • Quick and convenient online application process.
  • Tailored options for individuals with bad credit or limited credit history.
  • Interest charges and potential additional fees.
  • Need to ensure repayment within the agreed term to avoid additional costs.
  • Borrowing should be done responsibly to avoid financial difficulties.

Are There Any Alternatives to Christmas Loans?

Yes, there are alternative options to consider:

  • Saving in Advance: Start saving a small amount each month leading up to the holiday season, allowing you to cover expenses without relying on loans.
  • Budgeting: Create a detailed budget to manage your Christmas spending and prioritise essential expenses.
  • Credit Unions: Consider borrowing from a credit union, which often offers lower interest rates and more favourable terms.
  • 0% Purchase Credit Card: If you have a good credit rating, a 0% purchase credit card can help spread the cost of your Christmas purchases interest-free for a set period, as long as you make the minimum monthly repayments.
  • Extended Overdraft: Speak to your bank about the possibility of extending your overdraft limit temporarily for the festive period.

Can I Get a Christmas Loan with Bad Credit?

Choose Wisely specialises in helping individuals with bad credit find suitable loan options. While having bad credit may limit your choices, our lending panel understands that everyone's circumstances are unique. They consider factors beyond credit history when assessing your application.

Are Christmas Loans a Good Idea?

Christmas loans can be a suitable option for individuals who need extra funds during the festive season. However, it's crucial to consider your financial circumstances and ensure repayment is affordable within the agreed term. Before taking out a loan, weigh the pros and cons, and explore alternatives to make an informed decision. Responsible borrowing is the key to a stress-free and enjoyable holiday season.

How Long Will I Have to Pay Back My Christmas Loan?

The repayment term for Christmas loans varies depending on the lender and the loan amount. Typically, repayment terms range from 3 to 36 months. It's important to choose a repayment term that aligns with your budget and financial situation. By making regular repayments, you can clear your loan within the agreed timeframe.

Will I Need a Guarantor for a Christmas Loan?

Whether or not you need a guarantor for a Christmas loan depends on your individual circumstances and the lender's criteria. Choose Wisely works with a wide lending panel, including lenders who offer loans without the need for a guarantor. However, some lenders may require a guarantor, especially if you have a poor credit profile. The decision ultimately depends on the lender's assessment of your creditworthiness. During the application process, you will be informed if a guarantor is necessary.

Frequently Asked Questions (FAQs)

Can I apply for a Christmas loan if I receive benefits?

Yes, it's possible to apply for a loan while receiving benefits. However, it's important to consider your ability to repay the loan within the agreed terms. Ensure that the loan repayments are affordable alongside your regular expenses.

Can I repay my Christmas loan weekly?

The repayment frequency for your loans depends on the lender's terms and conditions. While some lenders offer weekly repayment options, others may have monthly or bi-weekly repayment schedules. Choose Wisely can help you find lenders that offer repayment frequencies aligned with your preference.

How quickly can I receive the funds from a Christmas loan?

The time it takes to receive the funds from a loan varies depending on the lender. In many cases, lenders strive to provide quick and efficient service. Once your application is approved, the funds can be transferred to your bank account within a few business days.

Will taking out a Christmas loan affect my credit score?

Taking out a Christmas loan and making timely repayments can potentially have a positive impact on your credit score. By demonstrating responsible borrowing behaviour, you can improve your creditworthiness over time. However, it's important to remember that missed payments or defaulting on the loan can negatively affect your credit score.

Can I use a Christmas loan for non-festive purposes?

While Christmas loans are specifically marketed to cover holiday expenses, you have the flexibility to use the funds for other purposes as well. However, it's advisable to use the loan responsibly and avoid unnecessary debt. Remember to consider the repayment terms and ensure you can comfortably manage the loan within your financial means.

Is Choose Wisely a lender?

No, Choose Wisely is not a lender. We are a regulated credit broker and a price comparison site authorised and regulated by the Financial Conduct Authority (FCA). Our mission is to help you make informed decisions by providing access to a wide range of loan options through our lending panel.

Written by
Mark Grimley
Head of Partnerships & Take Control Author at Choose Wisely

Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.

Important Information.

All of the information in this guide is correct at the time of writing.

If you complete a loan search application on the Choose Wisely website, the rates shown may vary based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 13.9%APR to a maximum of 1721%APR Representative and loan repayment periods range from 3 to 60 months.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
You can access your credit report for free from Credit Karma, Clearscore or Experian.

Warning: Late repayment can cause you serious money problems. For help, go to