Holiday Loans

The holidays are here again! For most, this is a joyous and festive time of year. Quality time is spent with loved ones, food and drink are prepared for celebration, and gifts are given to express thanks and appreciation. For some people, however, the holidays bring about a financial stress that overshadows the jubilation that should be felt throughout this season. Without adequate savings, the holidays can quickly become more anxiety-inducing than relaxing. You want to get all the special people in your life the perfect gifts that they will love and cherish for years to come, but without the proper funds this can be a difficult task. Luckily, personal holiday loans are available to help ease this tension and get you through the holiday season without draining your bank account. 

What is a Holiday Loan?

Simply put, a holiday loan is a personal loan for holiday usage that is designed to cover holiday-related expenses. This loan is offered by lenders, like Island FCU, to provide you with the financial flexibility needed to handle the increased spending associated with the holiday season. 

What Can You Use a Holiday Loan For?

Whether you need extra cash to book that trip to see your family, or need a little help getting the perfect gifts for all the important people in your life, a holiday loan can ease your financial burden and make this season more enjoyable. Holiday loans are highly versatile and can be used to cover the costs of a variety of different things including:

  • Paying for travel expenses: Whether you’re flying or driving, traveling these days can be extremely expensive. A holiday loan can help cover costly airline tickets, gas, hotel rooms, and whatever other travel expenses may arise.
  • Purchasing gifts: Everyone wants to be known as the person who gives the best gifts! Without money, however, this can be tough to accomplish. A holiday loan can help provide you with the funds needed to get everyone in your life the gifts that they’ll remember for years to come. 
  • Covering holiday decorations: Making your home festive and beautiful is part of the holiday season fun. A loan for holiday expenses can help you get the lights, ornaments, and decorations that make your home alive with the holiday spirit. 
  • Managing holiday party expenses: Holiday party expenses can add up really quickly, especially if you have a large family or a lot of friends. A holiday loan can help cover the high costs of these types of parties so that you can comfortably host an event that everyone will enjoy and remember.

Pros & Cons of Holiday Loans

As with any type of loan or financial agreement, there are pros and cons associated with taking a holiday loan. The important thing is that you understand all aspects of the loan fully before making any financial decisions.

Pros of Taking a Holiday Loan

Aside from providing financial relief for the expensive holiday season, some of the pros associated with taking a holiday loan include:

  • Low interest rates: Holiday loans often come with competitive low interest rates that make paying them off reasonable and achievable. 
  • Repayment predictability: Holiday loans are generally structured on fixed monthly payment plans, which makes it easier to budget for repayment. 
  • Convenience and flexibility: Lenders, like Island FCU, work to provide borrowers with terms that suit their specific financial needs, which makes holiday loans convenient and flexible.

Cons of Taking a Holiday Loan

Some of the cons associated with taking a holiday loan include:

  • Accumulation of debt: Like with any loan, it is important to practice responsible borrowing when it comes to taking a holiday loan. You need to be sure that you will be able to afford your payment plan, or else risk accumulating too much debt that can negatively affect your future. 
  • Consequences of defaulting: Aside from affecting your credit score, defaulting on a loan payment can lead to additional fees and potential legal action. 

Cost of a Holiday Loan

There are a wide range of factors that can affect the cost of borrowing, such as credit score, loan amount, and loan term. A higher credit score generally results in a lower APR, which is the interest charged for borrowing that represents the actual yearly cost of the loan. Longer loan terms result in lower monthly payments but higher total interest paid over the life of the loan. 

For instance, a high-credit borrower might enjoy a lower APR, reducing the cost of a $5,000 holiday loan over two years, while someone with a poorer credit rating could pay nearly double in interest for the same loan. Similarly, doubling the loan amount under the same conditions doubles the interest cost, and lengthening the loan term reduces monthly payments but significantly increases total interest. 

It is crucial for borrowers to understand the different aspects that can affect the overall cost of their loan. Borrowers must take their financial circumstances into account and be sure to choose the most economical option for their holiday spending. 

Where to Get a Holiday Loan

Holiday personal loans are available through many major financial institution in the country. The important thing is that you choose a lender that is reputable, trusted, and can provide you with a loan that fits your specific financial needs. Island FCU is a highly credible and reliable credit union that provides holiday loans with competitive rates, personalized services, and local support. We’re here to work with you personally throughout your entire holiday loan process. 

How to Apply for a Holiday Loan

Applying for a holiday loan through Island FCU is an easy and seamless process. This process includes: 

  • Gathering necessary documents: First you must gather the documents needed for applying for a loan. Your local credit union representative can let you know what will needed.
  • Completing the loan application: Once you have all of the necessary documents, you can fill out a loan application either online or in person at one of our branches. Our expert customer service agents can assist you with any questions you may have to ensure that your application is filled out correctly.
  • Submitting the application and receiving funds: With your application completed, you will submit and wait for approval. Island FCU strives for speed and convenience, so we will get back to you with your approval status as soon as possible. Once you’ve been approved, we will deposit the agreed upon amount into your account so that you can access your loan in time to take care of all of your holiday needs.

Alternatives to Holiday Loans

While holiday loans are affordable and convenient, there are, of course, alternative options. Each of these options, however, have their own set of pros and cons. Some alternative options include:

Paying in Cash

If you have enough cash to pay for all of your holiday expenses, then this is likely a better option than taking a holiday loan. Paying for holiday expenses with cash allows you to avoid debt and can help you keep better control over your spending. That being said, this option involves serious saving in advance, which is not possible for many people given their financial situations. Additionally, paying for holiday expenses with cash can put limitations on your available funds to pay for other living expenses like food, housing, and bills.

Using a Credit Card

If you already have a credit card, this option will likely seem more convenient than taking out a holiday loan. You can avoid the application process and get straight to buying the things you need for the holiday season. Oftentimes, credit cards come with cash back and rewards, making this option very attractive. However, credit cards come with much higher interest rates than holiday loans, which can result in you paying more money over time. Additionally, if credit cards are not paid off promptly, you can quickly find yourself in excessive debt.

Exploring “Buy Now, Pay Later” Options

Many sellers offer “buy now, pay later” options around the holidays. Through this option, you can choose payment plans that break up your expenses over an agreed upon amount of time. This can be a great option for buying more expensive gifts, however it can also lead to a negative impact on your credit score if you are late on any of your payments. With this option, you need to be highly aware of all of the purchases you’ve made, as well as budget accordingly so that you don’t miss any payments down the line. 

Personal Line of Credit

A personal line of credit is a flexible borrowing option where individuals can draw funds up to a set limit on an as-needed basis, only paying interest on the amount used, not the entire credit line. In contrast, traditional loans disburse a lump sum and require fixed repayments with interest accruing on the total loan amount. A personal line of credit can be a great option, as long as the interest rate isn’t too high or subject to change.  The fixed interest rates of traditional holiday loans are much easier to budget for.


Yes! As long as you understand the importance of responsible borrowing, a holiday loan can offer the financial support you need to comfortably get through the holiday season.

Just like with any other loan, holiday loans will negatively impact your credit score if you default or make late payments. By budgeting correctly and successfully paying off your holiday loan, you can strengthen your credit score.

Eligibility for holiday loans varies from lender to lender, however most lenders will generally require a minimum credit score, stable income, proof of identity, and a good debt-to-income ratio.

Generally, yes. That being said, bad credit may result in higher interest rates and less relatable terms.

You can improve your chances of approval for a holiday loan by working on improving your credit prior to applying, as well as by lowering your debt-to-income ratio and ensuring that you have a stable source of income.

Other financial options include paying in cash, using a credit card, exploring “pay now, buy later” options, and opening a personal line of credit.

Final Thoughts

The holiday season is meant to be a joyous time, however the stress associated with paying for holiday related expenses can put a serious damper on your festivities. Taking out a holiday loan can help relieve financial stress around the holiday season, allowing you to enjoy and celebrate the people you care for most. Island FCU offers personalized holiday loan options to help fit your unique circumstances and financial needs. The holidays don’t have to be stressful this year as long as you let Island FCU help you make responsible choices for holiday financing.

Explore Island Federal Holiday Loans

At Island FCU, we’re here to help ease your financial burden this holiday season. Our expert agents can help inform you of your holiday loan options and make sure that you make the right financial decision. With our competitive rates, personalized services, and local support, Island FCU is the go to lender for all of your holiday loan needs. The holidays are right around the corner, contact us today to learn more about how we can help make this season as stress-free as possible.