Yes, it’s that time of year again – the decorations and mince pies are appearing in shops – and it still feels far too soon to be thinking about Christmas! However, it’s a good reminder that now’s the best time to start planning your budget to avoid being stung by high-cost credit if you do need a helping hand.
There’s no doubt, Christmas can be a financially challenging time of year for many of us, and this year more than ever. If you’re considering some form of credit to tide you over, whether that’s putting a few presents on a store card, or borrowing a bit of extra cash from an online lender, what seems like a quick fix can lead to bigger money headaches in the long run. Hidden charges and high interest rates could mean the real cost of borrowing is higher than expected, leading to a financial ‘hangover’ which could last well into the new year.
Some tips if you do need to borrow:
– 0% credit card offers can be a good option for short-term borrowing, but you must be absolutely sure you have repaid your balance in full before the interest-free period ends.
–Overdrafts: Since April, bank overdrafts cost around 40% APR after the regulator intervened to make their pricing fairer and more transparent. So while it might be convenient, it’s unlikely to be the most cost effective way of borrowing to cover the costs of Christmas.
– APRs are not always what they seem: whilst headline APRs with some loan providers may look attractive, a ‘representative APR’ means that the rate must be available to at least 51% of applicants. In reality this means that almost half of applicants will pay more. This is not the case with The Co-op Credit Union – our loans rates are transparent and our standard product range is capped at a maximum rate of 29.8% APR.
Christmas Loans from The Co-op Credit Union:
Every year, we help hundreds of colleagues spread the cost of Christmas with an affordable loan. Typically, members borrow around £500 – £1000 and repay in instalments over 12 months, but loans are available from as little as £50 up to £15,000 for Christmas.
A loan from The Co-op Credit Union could potentially save you money and take the stress out of making your money go further this Christmas. Plus, by getting members started with an affordable savings plan; joining the Credit Union could be a great way to make next Christmas look brighter too.
Apply now and subject to approval of your application, money can be in your account within 2 working days of receipt of completed application.
What does it cost?
As a guide, we’ve compared a few of the popular loans products currently on the market to show how a Co-op Credit Union Christmas Loan could save you money:
Typical cost to borrow £1,000 for 12 months:
NB: Examples given are for illustrative purposes only, based on outline quotations taken from the provider’s websites and actual costs may vary.