If you are planning for the Christmas season and are worried about how you will afford everything in one go, you are not alone. Many people try to save their money but struggle to afford the sudden large expense of Christmas – decorations, presents, food and drink all come at a cost which your pay cheque that month may not cover.
This is why many people consider applying for an online loan for Christmas. The interest rate on personal loans are often lower than credit cards, which means if you must finance your Christmas spending, a loan could be the cheaper way to achieve it.
Now, it is important to be financially savvy when it comes to online loan applications. You should only apply, for instance, if you really can afford the loan repayments, and you need to think carefully about whether you do need to spend that money or not. Could you use savings? Could you cut down on what you buy? If you have thought through your options, and you decide a loan is best for you, then you will be pleased to know how easy it can be now you are able to apply online.
Here’s a few tips when applying:
#1 Debt to Pay ratio:
As USA Today say in their article about holiday loans, “You should have low monthly debt payments relative to your monthly income. If that ratio is too high, you may be rejected for a loan…If you’re chronically in debt, if you haven’t been able to pay off your credit card for three months or more in the last year, you need to get that in control first.” So consider your current situation first. If you have a poor credit file, this can also impact on your ability to get an online loan.
#2 Compare loan rates:
The best way to compare online cash loans is to look at the annual percentage rate, or APR. This factors in both the interest rate and any fees you must pay. You should do your calculations with an online calculator so you have a clear idea of what you will need to pay, and when. Be clear about exactly what you are borrowing, and if you have a question, ask the company directly. You can also compare loans online here if you’re based in South Africa.
#3 You will need a few details, first:
When applying for instant online loans, you will need a few bits of information to input onto the website. Remember, you should always use a reputable company and check out reviews of that company to ensure you are dealing with the best lender. Typical items they will need from you include, for instance, with an established lender like Wonga’s online loans, your SA ID number, your bank account, your cell phone number and your most recent payslip or bank statement showing your income.
#4 Spend your money wisely:
It can be tempting to spend your money all at once, but remember it is all money you need to pay back. So, don’t go too mad, but do enjoy the festive season!