As Christmas is approaching, increasing buying spree. Every moment you remember who it is socially worth giving a gift: colleagues at work, friends to see you around Christmas, relatives, and of course your family. The budget bursts at the seams or it is clear in advance that it will not be enough.
This situation comes with offers for pre-Christmas loans, loans and offers to buy gifts in installments. If you can, avoid them as a devil cross.
This year’s loan will rob you of next Christmas
There are all sorts of pre-Christmas loans. Your bank may allow you to overdraw your account or offer you a credit card. For them, the advantage is that you do not have to spend the full amount, interest is calculated only on what you actually spend. However, both of these types of loans tend to be very high and you will recover more slowly from this type of debt.
Another option is to take a consumer loan that you will regularly repay in monthly installments. The interest rate is not high, on average about 8.5% (but most important is to look at the APRC). Sounds acceptable, especially if you spread the amount over the year – but you should save that money for Christmas next year. In a year you’ll be in the same situation, poorer by the amount paid on interest.
Sellers often tempt customers to purchase a gift in installments. It sounds tempting, but it’s also a kind of loan. You do not close it directly with the merchant, but with the provider (bank or non-banking company). And it carries certain legal risks. For example, you may not supply inaccurate or misleading information. And if the recipient wishes to return the gift for any reason, you must not only return it to the merchant, but also inform the provider. However, if you bought the installment gift in a brick and mortar store, you cannot withdraw from the contract.
How to get out of an awkward situation?
While we are lenders, we consider it a social responsibility to warn against irresponsible indebtedness. Indebtedness for Christmas presents really makes no sense. Choose gifts that are inexpensive. Do not mind that “borrowing is normal, this is how it lives today”.
If your budget is not enough, then who you can, make it there and put a “certificate” in the envelope – you make a funny confirmation that the person will receive this and that gift as soon as technically possible. You get it from the January paycheck. Or make a voucher for your service, because human help is often more welcome than most common gifts. And feel free to admit that you have no money left due to unexpected gift expenses.
And if you already have debts?
If you are already in debt, overgrow your head and other expenses are ahead of you, then it is best to consolidate loans. Contact us and we can summarize your obligations into one convenient Mortgage.
You will pay your debts and, thanks to low interest and long maturity, you will reduce your monthly payments. You’ll get space to earn revenue each month.