November 8, 20235 Reasons to Use a Holiday Loan During High Inflation

Between the twinkling lights, cheerful music, delicious food, and endless laughs with family and friends, the holiday season is the merriest time of the year. But those ear-to-ear smiles don’t always come cheap. From travel and entertaining to gifts and decorations, the holidays can get pricey. Add in rising inflation and higher prices, and many are beginning to stress about the upcoming celebrations.  

Before you pull out your credit card and start swiping, there’s another option to help pad your holiday budget. Often overlooked, a holiday loan is one of the best ways to cover higher costs. It comes packed with perks many don’t realize – especially during periods of inflation. 

What is a Holiday Loan? 

While a “holiday loan” sounds festive, it’s technically a personal loan (commonly called a signature loan). Some lenders will offer special incentives or package their loans in a fun way for the holidays, but these loans generally operate in the same fashion. 

Holiday loans are unsecured loans, meaning there is no collateral required. You’ll receive a specific amount of money that you repay over a designated timeframe.  

Yes, credit cards are convenient, but holiday loans offer five substantial benefits to help keep the holidays merry and bright. 

  1. Easier Budgeting

Once Mariah Carey’s “All I Want For Christmas Is You” hits the airwaves, it’s hard for many to turn off that cheerful holiday spirit. And once you’re in the giving mode, it’s easy to get carried away. That’s where a holiday loan shines.  

With a holiday loan, you’ll receive a specific amount of money, for example, $1,500. Then, you can create your budget around that amount. Once it’s gone, it’s gone – no swiping credit cards or raiding your emergency fund. Setting limits like these is a great strategy to keep your spending in check and ensure you don’t start the new year with a heaping credit card bill. 

  1. Lower Interest Rates

When prices are rising, every penny counts. Finding ways to reduce costs is paramount. Luckily, the interest rates on holiday loans are usually much cheaper than traditional credit cards – especially if your go-to card is from a big bank (where rates often reach up to 29% APR!). 

With less money going toward interest payments, you’ll have more to spend on holiday fun and those you love.  

  1. Fixed Interest Rates

People often don’t realize that most credit cards use variable interest rates today. This means that the interest rate can fluctuate with the economy. When the Federal Reserve raises rates, your variable-rate credit card will likely follow suit.  

Instead, holiday loans generally use fixed interest rates. When an interest rate is “fixed,” it will remain the same for the life of the loan. For example, most auto loans have fixed rates. This is beneficial because you won’t have to worry about interest rates jumping – causing you to owe even more on your outstanding balance(s).  

  1. Pay Debt Faster

Credit cards are one of the leading causes of financial challenges for people across the country. When you’re only required to make a minimum monthly payment, it can take several years to repay outstanding balances.  

Our holiday loan takes a different approach. This loan is designed to help you avoid long-term debt and repay the balance quickly. Your loan will have set monthly payments over a 12-month period, so you’re not still stuck paying off the previous year’s expenses come next holiday season. 

Apply today! 

  1. Pay Your Way

Everyone has a different preference when it comes to spending their money. Some people prefer to use cash to make budgeting easier. Others like to earn rewards on their credit cards and repay the balance in full monthly. Whatever your spending style, it’s possible with a holiday loan. 

Here are three ways you can match a holiday loan to your spending style:  

  • Cash: If you’re a visual person, budgeting with cash is an excellent method. It’s easy to divvy up your money based on your planned expenses and prevent overspending. When you receive the funds from your holiday loan, you can withdraw the money as cash. Then break it out accordingly.  

NOTE: When shopping, it’s recommended you do not carry large amounts of cash. You don’t want to attract unwanted attention to yourself. If you want to keep your holiday funds separate from your everyday spending money for budgeting, you might consider opening a pre-paid debit card. 

  • Debit Card: When you receive your holiday loan funds, transfer the balance to your Checking Account. Then, you can use your debit card for all your purchases. This strategy lets you enjoy the convenience of making purchases online and in-store hassle-free. Plus, it’s easy to log into your account anytime to check your balance.  
  • Credit Card: To all the rewards-seekers out there, don’t fret! You can still use your credit card to earn rewards – even with a holiday loan. This strategy does require a bit of discipline on your part, though. Once you receive your holiday loan, deposit it into your Savings or Checking Account. Then, as you make holiday purchases on your credit card, repay that owed balance immediately with your holiday loan. You’ll continue to rack up rewards but walk away without any high-interest credit card debt! 

We’re Here to Help! 

We want all our members to experience the very best holiday season. While rising prices might cause a bit of unwanted stress this year, affordable options are available to keep the season merry. 

If you’re interested in learning more about holiday loans or are ready to apply, we’re here to help. Please stop by any of our convenient branch locations or call 800-226-6673 to speak with our Member Contact Center today. 


Each individual’s financial situation is unique and readers are encouraged to contact PEFCU when seeking financial advice on the products and services discussed. This article is for educational purposes only; the authors assume no legal responsibility for the completeness or accuracy of the contents.  

*Rate is quoted as Annual Percentage Rate (APR) and is subject to change if a term other than the term listed above is chosen. Estimated monthly payment of $108.09 for 12 months at 12.00% APR. The payment amount may vary based on the payment due date selected. This offer is contingent upon creditworthiness requirements. You may request a different loan amount, however, the interest rate and estimated monthly payment may change. Income verification may be required. This offer is available November 1 – December 31, 2023. 

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