What is a Holiday Loan?
Posted: September 26, 2022 in Credit
What is a Holiday Loan?
A Holiday Loan is a short-term personal loan that can be secured or unsecured. It can be used to finance holiday expenses, gifts, and events. Holiday loans usually have a grace period of between 30-60 days.
What You Need to Know About Holiday Loans
Secured loans
These are loans that are backed by physical collateral. Collaterals can be in the form of things that have value, such as a car or an expensive piece of jewelry.
As with other secured loans, holiday secured loans are subject to credit checks. They also have lower interest rates, extended repayment periods and allow you to access higher borrowing limits giving you access to more money.
Unsecured loans
Unsecured holiday loans typically have higher interest rates, but the borrower has more flexibility to repay. These are loans that don't need any collateral. They are also known as signature loans.
Personal loans
Personal loans are forms of credit that come with already established credit lines. You can use them to make big money purchases or merge high-interest credit card liabilities into one low-cost monthly payment.
Personal loans have low-interest rates and don't require borrowers to have perfect credit to qualify for them. As such, they can be great options for those with less-than-stellar credit ratings.
Interest rates
Interest rates are the fees a lender charges for borrowing money. This percentage is applied to the amount you borrow and is paid back over the life of the loan.
The interest rate on holiday loans usually ranges from 7-14% APR. The APR is the Annual Percentage Rate, which measures your interest rate if you borrowed $1,000 and paid it back in 12 months.
How to Apply for a ProFed Credit Union Holiday Loan
To apply for a holiday loan with us, you must first register to become a member. Once you're registered, follow these steps to apply for your loan.
- Visit our website www.profedcu.org/borrow/personal-loans
- Select the "Services" tab
- Select the "Borrow" tab
- Scroll down to your preferred type of loan and select it
- Read through the various loan options and click on "Apply Now" on your desired option
- Complete the application form and submit
- Wait for approval; approval time varies with different products
- If approved, sign the loan agreement and receive funds
The documents we require in your application include:
- Identification documents showing your name, date of birth, and Social Security number
- Proof of income - 3 most recent pay stubs or 2-year tax returns
- Proof of residence - a current utility bill in your name or a bank statement with an address listed
- Account information for automatic deduction of loan payments (If checking is selected)
Our Tools and Resources
- Loan Calculator: We offer several convenient loan calculators on our website. These calculators help you compute your monthly payments and make an informed decision.
- Loan Rates: At ProFed, we offer personal, auto, home, credit, pledge, and recreational loans with rates as low as 1.89% APR.
- Loan Protection: We make asset and loan protection a top priority for our members. Members can apply to various discounted loan and asset protection plans. This is a great way to protect your finances from unforeseen financial disasters.
We also offer several other digital tools at ProFed to make your borrowing and repayment seamless and manageable. This includes a budget calculator, a digital banking app, and a credit score tool. Contact us today to familiarize yourself with the rest of our great tools and get a holiday loan quickly to sort out your festive budget.
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