When Christmas comes along it can be easy to start to panic about how we will afford it. Some people manage to save a bit of money each month of spread the cost so that it is more affordable. However, not everyone does manage to do this and so as December approaches they can begin to panic about how they are going to afford everything. Most people will buy gifts for friends and family, they might buy decorations, new clothes and extra food. All these costs will add up and it can mean that you may not be able to afford everything and may consider getting a loan to cover the cost of the food that you will need on top of everything else. There can be a lot of stress at this time of year and worrying about a loan can add to it so it is important to make sure that it is the best possible solution for you.
Consider what loans are available
It is worth taking a look at what loans are available to you. It can be all too easy to rush into a loan without thinking about whether it is the best one. Start by thinking about how much money you think that you will need to borrow and then look at the types of loans that offer that amount.
If you are not sure about what loans are available and how much you can borrow from them, then you could ask a financial advisor. If you want independent advice then you will have to pay for it unless you use the money advice service. However, you could go into you bank and speak to their financial advisor. They will try to sell you their products, but you should be able to find out all about different types of loans and which are suitable for what. If you are looking to borrow money to pay for extra food, then it is likely that you will need a credit card, overdraft or short term loan. Depending on your credit record you will have different options though. The better your credit record; the more options you will have.
Compare the loans, both on the price as well as what they are offering so that if you do decide to have one, you get the best possible one for you. It can take time to do this but it is worth it as it can save you a significant amount of money.
Consider how you can manage repayments
It is well worth thinking about how much you will have to repay and when. All loans have to be repaid and you will have to pay back what you have borrowed plus interest and fees. You should be able to find out form the lender exactly how much you will be expected to repay and when. This means that you will be able to work out whether this will be affordable for you. This is easier than you might think.
You will need to look back at bank statements for the last few months and see whether you would normally have enough money available to cover those repayments. If you do not, then look at the sorts of things that you have been buying and think about whether you can go without some of them, just until the loan is repaid.
It is also worth considering how you will manage if the interest rate goes up and therefore your repayments increase. This could happen if the Bank of England base rate goes up but it could also happen at any time if you are on a variable rate as lenders can choose whether they change interest rates and when.
Think about alternatives
It is worth thinking about whether there are any alternatives to borrowing the money. Firstly think about whether you really need lots of extra and expensive food for Christmas. Many of us end up putting on weight at Christmas due to indulging in extra cakes, pies, biscuits, chocolate and sweets which we often regret afterwards. If you are having a party or family gathering, consider asking whether they will contribute towards the food so that the cost can be shared among everyone. Consider shopping ta budget supermarket to keep the costs down as well.
If you have savings then try to use these rather than borrowing money. If you do not then you may be able to get some extra money by earning a bit more. There are often extra job opportunities around at Christmas and you might also be able to sell things that you do not need more easily at this time of the year. You may also be able to find some ways to earn extra money online. Try keeping down the costs of the other things that you are buying so that you have more money available for food.