By this time, your Christmas budget should have been prepared because soon you will start shopping. There are a lot of items that are recommended to be bought before a month because then retailers hike prices. If you are budget-conscious, you will keep this thing in mind.

But unfortunate events can occur at any time. It is likely that you lose your job, and you have to bank on your savings unless you land a new job. This means shrinking your Christmas budget. Despite applying for unemployment benefits, you may need to dip into your savings to get by.

Doorstep money loans 4 unemployed can come in handy when you have financial emergencies. But some people ask if it is possible to use these loans for Christmas expenses.

What are doorstep loans?

Doorstep loans refer to a sum of money that you get from a direct lender to fund any small expenses. When you are unemployed, they are called Doorstep Loans for the unemployed. As the size of these loans is not very small, you will be required to settle on the due date in full. The repayment length of these loans cannot be more than a month.

The fact is that the doorstep is a kind of service, not a kind of loan. As the amount is handed in on your doorstep, the loan is called a doorstep loan. In fact, doorstep loans are small emergency cash loans. They are also known as payday loans.

These loans are aimed at funding small emergencies like a car repair, so the disbursal is quick. The representative will call in on your house at your scheduled date and time to discuss your credit requirements and complete small paperwork. You will sign the agreement and get money on the spot.

It is not necessary to have a bank account for these types of loans as you will get and pay money on your doorstep. However, do not forget you will have to pay fees because of the visits of the representative. It can make your debt quite expensive.

Christmas expenses are not an emergency

Having said that, doorstep loans are aimed at funding small emergency expenses. Christmas expenses cannot count as unexpected expenses. So, it can be concluded that you cannot use these loans for Christmas expenses.

Emergency expenses may involve several types of expenses, and to some extent, Christmas expenses could be part of the emergency. For instance, you have built a Christmas party budget worth £2,000, but unfortunately, you have fallen short of £500. You can borrow £500 through doorstep loans. “As doorstep loans are a type of payday loan that you can use for any reason when you need money, lenders will not restrict you from borrowing money for Christmas expenses.”

Since you are unemployed, you will have to ensure that you can repay the debt on time. If you have unemployment benefits, you can serve them as part of your income. Your lender will decide on the borrowing sum based on your repaying capacity. However, you can also use other income sources such as rental income, passive income from freelancing and contract-based jobs.

When you need money for Christmas expenses, Christmas loans are a better choice. In case your credit score is not so good, you will be eligible for Christmas loans for bad credit. When you are unemployed, you may seek doorstep service so that Christmas loans will be addressed as doorstep loans.

Christmas loans are bigger than doorstep loans

Although doorstep loans can be a part of Christmas loans, they will not let you borrow a considerable sum. Christmas loans are not just aimed at funding Christmas-related expenses such as parties, food, and decorations, but they are also aimed at vacations.

Of course, you will need a larger sum of money for your trip. In this case, Christmas loans will be the best bet. “If you are out of work, you will have to prove that you have sufficient income to pay off the debt on time.” The repayment length of these loans will be three to four months, which means the size of monthly instalments will be bigger. It means you will have a lot of pressure on payments in your pocket.  

The risks of doorstep loans

Whether or not you are unemployed, doorstep loans are associated with some sort of risk.

• Doorstep loans will accrue high-interest rates. They could be higher if you are out of work.
• Doorstep loans involve additional fees that make them more expensive. The fee structure depends on the number of visits, and they will be separately attached to loan origination fees.
• Doorstep loans cannot help do up your credit score even if you pay them on time, but a missed payment can pull your credit points, worsening your borrowing ability in the future.

How to get the best doorstep loan

Follow the following tips to ensure that you get the best doorstep loan:

• Do proper research so you know about interest rates and fees that lenders charge.
• Check your credit report. It must not have any errors that affect your credit points.
• Have a strong passive income source to offset the impact of unemployment and a bad credit rating.
• Use calculators to evaluate the estimated cost.

You should borrow money from a reputed direct lender like 1oneFinance so you can easily handle the debt. If you find that the debt will blow up your budget, avoid borrowing money. Instead, seek help from friends or relatives.

The final word

Christmas expenses can be funded with doorstep loans but only small expenses. Your state of unemployment will not get in your way of borrowing if you have passive income sources. However, if you want to borrow a larger sum, you will need to take out Christmas loans.

The post Can you fund Christmas expenses with doorstep loans? first appeared on 1onefinance.