Core Insights - Consumers are expected to spend an average of $736 on holiday gifts in 2025, reflecting a 10% increase from the previous year according to a Visa survey [1] Holiday Loans - A holiday loan is a personal loan designed for seasonal expenses, such as gifts and travel, often referred to as a "Christmas loan" by some lenders [3] - Key features of holiday loans include the need for good credit to qualify for favorable rates, typically fixed interest rates ranging from 7% to over 35%, smaller loan amounts usually under $5,000, and a repayment term of one year or less [6] - Most holiday loans are unsecured, meaning they do not require collateral, and may come with potential fees such as origination fees that could exceed 10% of the loan amount [6] Risks of Borrowing - Borrowing for nonessential expenses can be risky, especially without a solid repayment plan, as it may strain finances in the long run [2][5] - Predatory lending practices are a concern, with warning signs including aggressive sales tactics and unclear loan costs [4][5] Alternatives to Holiday Loans - Saving money specifically for holiday shopping can help avoid debt, with strategies such as setting aside a monthly amount or participating in savings challenges [10] - Earning extra income through seasonal work or side hustles can also help cover holiday expenses [12] - Buy now, pay later (BNPL) services allow consumers to finance purchases in installments, often without interest if paid on time [13][14] - Using credit cards, especially those with 0% APR promotional periods, can provide an interest-free option for holiday spending, but caution is advised to avoid accumulating debt [15][16]