Festivals are unquestionably happy times. In India, festivals start from Ganesh Chaturthi and go till Christmas. During this time, we open our hearts and wallets to buy gifts, new items, jewelry, gadgets, and clothes for families. 

The holiday season positively affects the Indian economy as most people spend big and make large-ticket expenditures during the holiday and oncoming marriage season.

During the festive season, personal loan apps and consumer durable loan companies offer many festival loan offers. Many attractive packages are rolled out during the time to help you manage your festive spending. In addition, many consumer durable and personal loan companies offer loans at zero processing cost.

What are festive loans?

Festive loans are personal loans issued at a lower interest rate and for a smaller loan amount. The loans are generally offered as a small sum of around ₹50,000. Also, the eligibility criteria for festive loans are more relaxed. 

With many attractive festive offers on the market, it’s only sane to take out a personal loan to renovate your home or avail a consumer durable loan to buy a new TV. So let’s find out if taking a personal loan for festivals is a wise decision.



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When should you take a festive loan?

Taking out a personal loan for your holiday is not a bad idea if you are prepared to repay. A festive loan can also be helpful to assist in making large expenditures like buying jewelry or appliances that you may not cover with your regular income. You can also use festive loans to pay for small-scale house modifications. 

Personal and consumer durable loans might be a reasonable alternative during the festive season as they can be availed at somewhat low-interest rates and processing costs.

Things to keep in mind before taking a festive loan

You must bear the following two factors in mind while availing of festive loans:

  • All that shines is not gold: It is not wise to become excited with one ‘amazing’ personal loan offer and overlook other better options available. Instead, you must look for bargains from other financial institutions and loan apps over the holiday season and compare them to find the best offer and interest rate. 

You must consider the full cost of the loan and not just the offers and discounts. For example, in most cases, even a 1.5% interest rate reduction is better than a 100% processing fee waiver.

  • Debts stay longer than festivals: Loans do not go away after the festive season is over. EMIs are required to be paid once you take out the loan. You must budget carefully to avoid being taken off guard, as EMI payments will increase your monthly spending.

What is the best way to take out a holiday loan?

There are many financing options available today. You have personal loans, credit cards, consumer durable loans, card EMIs, etc., options offered with discounts and incentives. So let’s figure out the best way to take out a holiday loan.

Personal loans have interest rates lower than credit cards. However, you must choose a financing solution depending on the type of spending. You can use personal loans for festive purchases like buying a two-wheeler or a home appliance. 

Some other financing options apart from personal loans are consumer durable loans and credit cards. If you want to buy household equipment, a consumer durable loan can be an excellent option. Also, they can be availed at a more economical interest rate as compared to a credit card. 

Furthermore, with consumer durable loans from personal loan apps, you won’t have to deal with piles of paperwork, making holiday shopping less of a burden.

If you want to buy with your credit card, you must keep its limit clear for festive purchases. Also, note that credit cards can charge high interest and must be used after careful planning.

Final thoughts

So, availing of personal loans for festive season shopping can be a good idea when you need a small loan amount for a short tenure. But, before choosing a lender, weigh all the options available to you and then decide.

Also, with easy access to loans, don’t go overboard and borrow excessively. Instead, borrow only what you need and what you can repay without stretching your finances. 

Anil Sumra

Anil Sumra is a Digital Marketing Expert with more than 10 years of experience. He loves to write on various financial topics online to create financial awareness. He holds a bachelor’s degree in Finance & Management.

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