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Personal Loans for Holiday Spending


It’s officially fall, and that means the holidays are right around the corner. From checking off the mile-long gift lists to traveling, entertaining, and more, holiday spending adds up fast. If you haven’t already saved for these types of expenses, don’t panic. Relax! You can do it without having to dip into your savings or rack up a high-interest credit card bill that you’ll be paying off well into the next year. Instead, consider a fixed-rate personal loan to ease some of the financial stress and give you some peace of mind this holiday season.

What is a Holiday Loan?

A holiday loan is simply a personal loan meant for seasonal spending. When you take out a personal loan, you agree to make set monthly payments for a certain length of time until the loan is paid in full. Personal loans—including those used for the holidays—tend to have lower interest rates than credit cards. Plus, your monthly payments will be consistent, unlike with credit cards, so you’ll know exactly how much you have to pay each month—no surprises.

Pros of Using a Personal Loan for Holiday Spending

Quick Funding

Once approved, you can have your funds in hours1 — well, that is if you get a personal loan with Arkansas Federal Credit Union. Since all loan decisions are made right here in Arkansas, we’ll get your funds to you fast, so that you can hit those black Friday sales early and rest easy knowing your holiday funds are in place.  

Save Money

A personal loan usually has a lower interest rate than credit cards, which means you’ll save money in interest overall. Plus, the monthly payments for a personal loan could even be lower, depending on the rate and term (time you’ve agreed to pay the loan back). 

Only Spend What You Borrow

With a personal loan, you’ll receive the full loan amount in one lump sum. This means you know the total amount of money you have available for holiday shopping ahead of time—unlike credit cards where your finances can quickly spin out of control.  

Set Fixed Payments

When you use a personal loan to help with holiday expenses, you’ll have a set repayment period. In other words, you’ll have a fixed monthly payment with an end date of when your loan will be paid in full. You can even use our personal loan calculator to see what your monthly payment could be

Improved Credit Score

Another advantage to using a personal loan to cover the holidays is that it can help increase your credit score. With on-time payments made consistently, your credit score can improve.


An unsecured personal loan is money borrowed from a lender that isn’t secured by property like a house or car. While other lenders may place a lien on your assets for a personal loan, Arkansas Federal personal loans are unsecured.

Cons of Using a Personal Loan for Holiday Spending

Qualifying Interest Rate

Your borrowing rate, or Annual Percentage Rate, relies heavily on your credit score. So, if you have a lower credit score, you may only be eligible for a higher interest rate. 

Prepayment Fee

Some lenders may charge a prepaying fee if you choose to pay it off early. However, at Arkansas Federal, we don’t charge a prepayment fee on personal loans.

Monthly Payments

Once you’re approved for your loan and have your funds, you’ll need to be able to pay your monthly payment on time and in full. If you miss payments, your credit score could drop, and you could also be charged extra fees. If you’re concerned about the payments, then a personal loan may not be for you.

Final Thoughts

If you want to avoid draining your savings or getting bogged down with high-interest credit card debt, then be practical and apply for a personal loan today. You’ll be glad you did—especially if it helps you avoid long-term debt, pay less interest, and stick to your holiday budget.

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