Personal Loans: Christmas repayments

Taking out a personal loan is a good way to cover the extra expenses you'll face around Christmas. When deciding your repayment period, consider the following points...

What is the longest interest free period you can get?

The interest free period varies with each lender and can depend upon a number of factors, including the amount of the loan and your credit history. If you're able to get your loan paid off within this time period, you'll only have to pay back what you borrowed.

What is the rate like after the interest free period?

Interest free periods are usually quite short and once the offer is over the interest rate can soar. Make sure that you choose a loan with a competitive long term rate, even if you think that you'll be able to pay it back within the interest free period. You never know what unexpected costs could arise.

Would you prefer a fixed or variable loan?

There won't be any nasty surprises with a fixed rate loan, but market conditions may favour a variable rate. Do you research before you buy.

Have you budgeted for the repayment period?

It's a good idea to plan ahead and draw up a budget for the months that you'll be repaying the loan. That way you'll be confident that you can handle the repayments.

Have you thought it through?

Christmas is a wonderful time of year, but it's over so quickly. You don't want to burden yourself with months of debt for the sake of a few weeks of fun. Try to pay off your debts by March.

Could you consolidate your loan with existing debts?

Consolidating outstanding loans could simplify your finances and make your debts more manageable.