Personal loans can help during the holidays, but experts urge to use them cautiously.

InvestigateTV - Taking out a loan to pay for the holidays is always a last resort, but if you need to take one out, experts suggested you do your research.

The first step is to look at your credit cards and figure out exactly how much you would be charged in interest. Then, compare that rate with the interest rate of personal loans that are available to you.

According to our partners at NerdWallet, personal loan rates as of today can vary from 6.99% to a whopping 35.99%. These rates depend on a variety of factors including credit score and amount borrowed.

Cherry Dale, a financial coach with the Virginia Credit Union, said you want to know all your options before you decide which way to pay for your holiday shopping.

“Also look to see if you have points,” Dale said. “A lot of us have points that we’ve accumulated that we can use for things like gift cards, or purchases in stores before you actually utilize that credit card.”

You can take out personal loans for as little as $500 dollars, but the interest rate is usually higher because it’s unsecured.

Dale said personal loans have fixed repayment schedules and set payment amounts, which is different from a credit card loan where you determine the amount of repayment (the minimum or above) and there is no set deadline to pay it off.

She said your best course of action would be to pay off your holiday debt this year as soon as possible and then start saving a little extra money throughout 2023 for your holiday shopping next year.

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