We all want to make Christmas the most magical time of year, particularly when we have children. But often this requires money that we don’t necessarily have to spend. So it’s hardly surprising that many families turn to loans at this time of year. But while it could allow you to get the food, gifts, and decorations you desire, a Christmas loan can have adverse effects too. It you cause a strain on your finances when the new year arrives which could result in you having to take additional loans out. This continual cycle can be difficult to break out of and could even put your home at risk. So while you want to make this Christmas the best ever, ask yourself these questions before taking out a loan.
Is a loan my only option?
Before you take out a loan for Christmas, it’s always worthwhile to consider what other options you may have. You might be able to borrow some money from family, without having to worry about interest rates or late fees. If you’ve got unwanted clothes, electronics around your home, you could sell these online for some quick cash. Visit http://www.lifehack.org/ for ideas on other items you could potentially sell. You should also assess your Christmas budget to see if it can be reduced and made more affordable. Only once you have exhausted all options should you then consider a loan.
Can I afford the repayments?
This is a question that should be answered as honestly as possible. The last thing you want to do is have to spend all of next year living on a budget that’s incredibly tight. This could mean you and your family can’t go on vacation or days out. You might also have to change how often you shop and where. You need to consider whether this sacrifice is worthwhile to ensure your family has the best Christmas ever. In addition to affording the repayments, you also need to consider whether you can pay it off within the set time frame. If you only have a short time to pay it back, think about whether you could manage it.
What will happen if I can’t make the repayments?
Being unable to make your repayments could happen for a number of reasons. You might lose your job or have to quit to take care of your children or an elderly relative. Relying on one income could mean you aren’t able to pay off your debt on time. This could affect your credit score, leave your family in a vulnerable position or even result in lenders taking your home. This will all depend on the type of loan you have taken out and how much you borrow. So it’s vital that you consider your options carefully before taking any type of loan out. You should also visit https://realpdlhelp.com/ and other loan consolidation services. They could help you deal with your existing loans which could help make Christmas shopping more achievable.
If you’ve answered these questions honestly and considered your finances, you should now know whether a loan is the right option or not. Remember that a wonderful Christmas can still be achieved without getting into debt.
*This was a contributed post. Keep in mind that Hints and Tips Blog does not advocate going into debt except in dire circumstances and Christmas is not one of those occasions.