Christmas Loans - A Gift on the Occasion of Christmas
It is still a few weeks to Christmas and every one is already up with demands.
Little Mary, ever eager to add to her collection of dolls, wants the latest in the Barbie series.
Eric who is a couple of years elder to her wants to be left no further. He is insisting on a bicycle.
Helen, your wife has invited a multitude of guests for a sumptuous dinner on the auspicious night, and thus needs a part of the festive budget to be assigned for that purpose.
You too would have participated in the celebrations with gusto to match that of your family, had you not been troubled at the turn your finances are taking because of these expenses.
Christmas loans can lead to an end to these issues.
It is more convenient to pay for the Christmas festivities through a Christmas loan rather than through ones monthly income.
Savings for the day starts much before the day actually arrives.
In the process, many needs are curbed to make way for the savings.
However, statistics reveal that the savings are seldom able to help with the Christmas payments.
About a third of the Australian population falls in debt because of unheeded expenses during Christmas.
It is hard to not to be spending when the entire populace is on a shopping spree.
So, why not use a Christmas loan for the purpose.
Christmas loans allow an easy disbursement of the bills incurred during Christmas, but without prioritising the finances.
A Christmas loan drawn to make the payments as they come will be a better idea.
The individual knows his limits and would seldom try to cross the limit by spending more.
The borrower applies for the loan beforehand so that he can get the money on time.
Being in possession of the money increases the bargaining power of the borrower.
This is visible in the choice that he has in expending the amount.
The borrower is not obliged to spend the entire amount on Christmas festivities.
He can save the whole or a part of the loan for being used for purposes like debt settlement, home improvements and such other purposes as may be desired.
Those who are already in debts and feel that they missed the bus by not taking Christmas loans are not too late.
Christmas loans are available for them too.
They just have to add the total payments that are due from them and apply for a Christmas loan equivalent to the amount.
The ease in disbursement of debts is not the only point that works in favour of Christmas loans.
Christmas loans are not the only finance option available to the residents of the Australia.
It is because of a better interest rate that counts for the popularity that Christmas loans enjoy for this purpose.
Loans in particular have a lower rate of interest.
Christmas loans being no different from the regular loan charge at the standard rate of interest.
Lenders sometimes offer festive discounts to the borrowers.
A festive discount cuts the interest rate by a few percentage points.
The borrower is charged at the discounted rate.
However, the discounted interest rate lasts for a period of five years.
Beyond this period, the borrower gets charged at the standard variable rate.
Repayment of Christmas loan is hardly a matter of concern.
To make the payment easy and convenient, the loan provider agrees to receive payments in small instalments in a certain period.
In fact, the interest is charged to compensate the loan provider for the time for which the loan amount has been blocked.
Thus larger is the period of repayment, greater will the cost of Christmas loans be.
Payments through small instalments allow the borrowers to accommodate the monthly repayments in their monthly salary.
In order to make the repayments less burdensome, decision on this count is made with the consent of the borrower.
If available with the lender chosen, the borrower may demand for repayment through methods other than the one mentioned above.
A few people pay the entire loan in one single instalment and thus save by way of interest; others pay only the interest during the term of the Christmas loan and the balance through a balloon payment at the end of the term.
The method of payment must be chosen with adequate considerations.
The author, Andrew Baker, has done his masters in finance from CPIT.He is engaged in providing free,professional,and independent advice to the residents of the UK.