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First-time personal loan use rises for festive spending
A recent survey found that 41% of respondents took a personal loan for festive expenses for the first time. This suggests a clear shift: more households are turning to credit to fund celebrations and seasonal spending.
What this trend signals
- Growing acceptance of credit: Borrowing for festivals is becoming more common and socially acceptable.
- Pressure on household budgets: Rising living costs may be pushing people to rely on loans to maintain festive standards.
- Easy access to credit: Digital lenders and faster approval processes make borrowing more convenient for one-off needs.
Why people are borrowing for festivals
- Higher prices for gifts, travel and food.
- Desire to preserve celebratory traditions despite tighter finances.
- Promotional offers and low introductory rates that make loans seem affordable.
- Short-term cash flow gaps among salaried and self-employed households.
Implications for lenders and policy makers
- Lenders may see increased demand around festive seasons and should prepare responsible lending checks.
- Policy makers and consumer groups might need to monitor affordability and debt levels to avoid over-indebtedness.
- Transparent terms and financial education can help first-time borrowers make safer choices.
Practical tips for consumers
- Plan ahead: Set a realistic festive budget and compare borrowing costs before signing up.
- Look beyond rates: Check fees, prepayment penalties and total cost of credit.
- Consider alternatives: Savings, smaller celebrations or staggered spending can reduce the need to borrow.
- Have a repayment plan: Ensure monthly payments fit your income to avoid longer-term strain.
The rise in first-time personal loan use for festivals highlights changing attitudes toward credit. With careful planning and clearer lending practices, households can celebrate without creating lasting financial stress.