Best Holiday Loans: Fast Funding & Low Rates
Get money in as soon as 24 hours for holiday gifts, decorations and travel
| Lender | User rating | Best for | APR | Term | Amount | Min. credit score | |
|---|---|---|---|---|---|---|---|
|
Multiple discounts | 7.99% – 35.99% | 24 to 84 months |
$1k – $50k |
580 | ||
|
Bad or no credit | 7.50% – 35.99% (Test) | 12 to 84 months |
$100 – $1M |
Not specified |
Holiday loans at a glance
Best For: multiple discounts
- Discount for using autopay
- Can apply with another person
- Get money in as soon as one business day
- Charges an upfront origination fee of 1.85% – 9.99% on all loans
- Charges late fees
You can apply for an Upgrade holiday loan with another person, which will improve your odds of getting more money and lower rates as long as your co-borrower has good or excellent credit. You can also get lower monthly payments by using Upgrade’s autopay discount.
While some lenders don’t charge upfront fees, Upgrade takes an origination fee of 1.85% – 9.99% off the top of every loan.
To qualify for a loan through Upgrade, you must meet the requirements below:
- Age: Be at least 18 years old (19 in some states)
- Citizenship: Be a U.S. citizen, permanent resident or live in the U.S. with a valid visa
- Administrative: Have a valid bank account and email address
- Credit score: 580+
Best For: bad or no credit
- One of the lowest credit score requirements on the market
- Frequently rated among the best in customer service by LendingTree users
- Get money in as little as one business day
- Only two repayment terms: 36 or 60 months
- Potentially high upfront fee of 0.00% – 12.00% of loan amount
Upstart loans are an excellent alternative to payday loans for borrowers with bad credit who need a quick loan to pay for last-minute holiday gifts and travel. Unlike payday lenders, Upstart charges affordable rates that max out at 35.99%. Plus, Upstart has an approval rating of 99% from LendingTree users and regularly earns high marks for customer satisfaction.
If you do choose Upstart for your holiday loan, you may need to budget for an upfront origination fee of 0.00% – 12.00% of your total loan amount. Upstart will take this fee from your loan before sending it to you.
Upstart has transparent eligibility requirements, including:
- Age: Be 18 or older
- Administrative: Have a U.S. address, personal banking account, email address and Social Security number
- Income: Have a valid source of income, including a job, job offer or another regular income source
- Credit-related factors: No bankruptcies within the last three years, reasonable number of recent inquiries on your credit report and no current delinquencies
- Credit score: 300+ (unless you’re an eligible college student or graduate, in which case Upstart could approve you with no credit)
What is a holiday loan?
Holiday loans are personal loans you can use to bridge the gap between your bank account and your holiday wish list.Before you use a loan to deck the halls, consider how last year’s borrowers feel about their holiday debt, according to a LendingTree study:
- 36% of Americans took out an average of $1,181 worth of holiday debt.
- 60% of people who have holiday debt are stressed about that debt.
- 42% regret how much they spent on their holiday shopping.
Avoid borrower’s remorse by exploring loan alternatives and by making sure your loan payments fit into your budget.
Cost of a holiday loan
When you take out a holiday loan, the lender will look at your credit to decide what rates to charge you. A bad credit score will land you higher interest rates and fees, which can make a holiday loan unaffordable.
If you have poor credit and want to take out a holiday loan, take time to improve your credit score beforehand. This will boost your chances of approval and save you money in the long run.
Holiday loans: The cost of borrowing
Based on our data, borrowing $5,000 for the holidays could cost you $1,481.28 in interest with good credit or $3,963.84 with fair credit. That means you can expect to pay more than $1,000 in interest charges on a $5,000 loan, even if you have a strong credit score.
Here’s how we did the math using our personal loan statistics:
| Credit score | 720 | 660 |
|---|---|---|
| Loan amount | $5,000 | $5,000 |
| Average APR | 17.71%* | 42.87%* |
| Loan term | 36 months | 36 months |
| Monthly payment | $180.04 | $249.00 |
| Total cost of the loan | $6,481.28 | $8,963.84 |
| Total interest paid | $1,481.28 | $3,963.84 |
Interest charges — the cost of borrowing any loan — will make an already expensive holiday season cost even more. Use a loan calculator to determine whether the cost of interest is worth it to you.
Should you get a holiday loan?
Don’t get a holiday loan if you can avoid it. Unlike mortgages or small business loans, holiday loans can qualify as “bad debt,” or debt that doesn’t benefit you financially in the long term.
Going into debt for nonessential expenses — whether in celebration of Christmas or any other holiday — will take a toll on your budget.
And if you choose a standard loan term of two to five years, you’ll still be making payments on this year’s stocking stuffers for the next few holiday seasons — unless you pay off your debt sooner. (On the bright side, all lenders we compiled above let you pay off your loan early with no penalty.)
If you do decide to get a holiday loan, avoid getting a payday loan and choose a reputable lender like the ones on this list. The lenders we highlighted cap their rates below 36%, while predatory lenders often charge rates in the triple digits. Payday loans can trap you in a cycle of debt, forcing you to take on more debt to cover the original loan when payments are due.
Pros and cons of a holiday loan
Pros
-
Scheduled payoff date
Unlike credit cards, holiday loans come with set repayment periods, so you’ll know exactly when you’ll be debt-free. -
Fixed rates and monthly payments
You can break up holiday expenses into predictable monthly loan payments that stay the same for the duration of your loan. -
Quick money when you need it
Many lenders offer fast funding, sometimes as soon as the same business day. -
Use the money for almost anything
You can use a holiday loan to pay for travel expenses, gifts or decorations. -
No collateral required
Unsecured loans like the ones above don’t require you to put up valuable property as collateral, so you won’t risk losing assets. -
Could improve your credit
Credit score issuers like to see a variety of credit types on your profile, so taking out a loan and making on-time payments can boost your score over time.
Cons
-
Interest on top of holiday expenses
Holiday loans cost money in the form of interest and fees. You’ll pay more for your holiday expenses when you take out a loan than if you paid with cash. -
Increased debt load
It’s generally not a good idea to take out debt and pay interest on nonessential expenses. -
Years-long repayment terms
You may be making payments long after the holiday season ends — and the next one begins. -
Loan minimums
Holiday loans typically start at $1,000, though some lenders only offer $5,000 and up. Check out credit unions if you need a smaller loan. -
Potential fees
Many holiday loans come with an upfront origination fee that will cost 1.00%-12.00% of the amount you borrow. Lenders will take this fee from your loan before sending it to you. -
Potentially high rates
Since holiday loans are unsecured, people with bad credit may end up with high APRs if they qualify at all.
How to find a holiday loan with LendingTree
Shopping around for a personal loan on LendingTree can save you an average of $1,659 over the life of your loan. Here’s how it works.
Tell us what you need
Take two minutes to tell us who you are and how much money you need. We’ll take care of the rest. It’s free, simple and secure.
Shop your offers
We’ll send you offers from up to five trusted lenders. Compare your offers side by side to see which one will save you the most money.
Get your money
Choose an offer and work with the lender to finalize your loan. Some people see money in their accounts in 24 hours, depending on the lender they choose.
Alternatives to holiday loans
Holiday loans can help break up your Christmas or other festive spending into affordable payments, but the bottom line is that it costs money to borrow money. Consider the following alternatives:
Pay in cash
The best strategy to avoid taking on new debt this season is to create a budget and save in advance for your holiday purchases. Here’s how:
- Create a budget. Make a list of all the purchases you plan to make, and research the costs. Include gifts, travel expenses, decorations and food.
- Divide the total cost by the number of months you have left to save. For example, if you need to save $600 for holiday spending and you’re starting in August, you need to save $150 each month to meet your goal before December.
- Stick to your budget. Remember that avoiding the temptation to overspend will keep you from paying for your holiday expenses well into the new year.
Credit card
If you’re not sure how much money you’ll need for the holidays, consider using a credit card. Credit cards allow you to borrow as much as you need up to your credit limit, and you’ll only pay interest on what you borrow.
If you have good or excellent credit, you can save money with a 0% APR credit card. These cards don’t charge you interest during the introductory period (commonly six to 21 months).
It’s easy to overspend when you have a high credit limit. In fact, 56% of people who went into debt last holiday season didn’t plan to do so. Remember that you’ll have to pay interest on any credit card purchases that aren’t paid off by the time the statement balance is due.
Buy now, pay later
Buy now, pay later apps allow online shoppers to break up their purchase into four equal payments, due every other week.
BNPL companies typically don’t charge interest or fees for these short-term loans, but some companies offer longer financing options that do come with interest. To use a BNPL service, look for the financing option during the checkout process.
Borrow money from family or friends
You can borrow money from family to cover your holiday expenses. To avoid financial tension, write up a personal loan contract ahead of time and commit to a repayment schedule in writing.
Get creative
- Instead of forking over cash for pricey plane tickets, invite out-of-town family to visit you or host a holiday gathering over Zoom.
- Hosts are expected to spend an average of $556 on hosting a holiday party. Instead of covering these costs alone, tell your guests to bring a dish and their favorite piece of holiday decor. You can even ask a family member to co-host the holiday with you to split the costs.
- Instead of paying for expensive custom holiday cards, make your own or buy standard cards online or at a department store.
- Instead of buying gifts for each of your family members, start new traditions like Secret Santa or white elephant. You can also give the gift of experiences, like a day at a local park or beach.
Frequently asked questions
Yes. Since lenders typically allow you to use the money for almost anything, you can get a loan for holiday expenses.
It’s even possible to get a holiday loan with bad credit, though it will be harder to qualify. Lenders that do work with people with bad credit charge higher interest rates, making the loan more expensive.
It can be hard to get a holiday loan if you don’t have good credit or much experience with debt. That said, personal loan requirements vary from lender to lender, and some companies are willing to work with bad-credit borrowers or people who are new to credit.
It’s worth taking the time to improve your credit score before you apply. Having better credit will help you qualify for more loans with better rates, which will save you money.
Avoid holiday loans if you can. Taking out debt always comes with risk, and there are particular risks that come with personal loans. If you’re sure you want to take out holiday debt, shop around and compare rates to improve your chances of getting an affordable loan.
Our methodology
We reviewed more than 30 lenders that offer personal loans to determine the top five holiday loans. To make our list, lenders must offer competitive APRs to the general public. From there, we prioritize lenders based on the following factors:
Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.
According to our systematic rating and review process, the best holiday loans come from PenFed, Prosper, SoFi, Upgrade and Upstart.