Does a Christmas loan make sense?

Christmas presents on pumps – overview of forms and financing options

Christmas presents on pumps - overview of forms and financing options

Many people want to fulfill one or the other wish for themselves or their loved ones for Christmas. However, there is often a lack of the necessary money to make all purchases. This is often a problem for parents with children. They cannot afford the gifts.

So that the children’s eyes still shine at Christmas and the new console or the new doll’s house is under the tree, some parents buy Christmas gifts on credit or installments. For example, they use:

  • the available overdraft facility of your checking account
  • the existing credit limit of your credit card
  • the offered payment break from mail order
  • the installment offered by retailers

The advantage of using these offers is that it is generally very easy to take out these forms of credit. However, it is disadvantageous to mention that the costs for these loans are very high, for example due to a high interest rate or a higher selling price, which compensates for a supposedly low interest rate.

In addition, it should be noted that there is the possibility of over-indebtedness for some of the financing options presented here, in particular in this context reference to the credit card payment and the payment break. The reason for this lies in the fact that with these forms of financing, the consumer usually has to repay the entire amount of the loan taken out in one installment. In many cases this is not easily possible for the consumer. Therefore, consumers should check in advance whether this form of financing is suitable for them.

The classic small loan can be a sensible alternative for financing Christmas gifts

The classic small loan can be a sensible alternative for financing Christmas gifts

The forms of financing already presented have the disadvantage that they are usually very expensive or can only be repaid in one installment. For this reason, most experts advise against this form of financing and rather recommend taking out a classic small loan from a bank.

The main advantages of taking out a small loan are the often more favorable terms and the possibility of repayment in constant monthly installments. It should also be noted that the use of funds for the financing of Christmas presents by a bank is not tied to a specific dealer. This gives consumers the opportunity to compare the offers of the different retailers. For example, he can buy the Wii and the doll house from the cheap dealer and finance these purchases with a loan.

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