The top 5 reasons people borrow money over Christmas

James D. Morgan/ Getty Images

“Christmas comes but once a year and when it does it’s rather dear.” This is quite a nice way to sum up the festive season.

But Christmas is also a great time to catch up with the people you love most. And when cash is in short supply to make the most of the season, an increasing number of Australians are avoiding the good ol’ credit card with all its trappings of confusing fees and high interest rates.

We see numbers of applications for our online personal loans increase most during the festive season. Below are the most common reasons given for taking out one of our loans over Christmas.

1. Debt consolidation


It can be tempting to be silly in the silly season (who would’ve guessed!), and the result can be overwhelming. But consolidating your debt into one easy payment can take the stress out of the whole situation.

Over 60 per cent of our loans go to Aussies who want to consolidate their multiple debts into one cheaper and simpler personal loan.

And with good reason.

The savings you can make by consolidating credit card debt are real and tangible. This is because by making only minimum payments on your credit card liability, you could potentially sentence yourself to decades of debt.

And this goes double or triple and so on if you have multiple cards. The credit card shuffle may have seemed like a genius idea at the time, but even the savviest of us can find ourselves getting stung.

Do yourself a favour this Chrissie, and consider consolidating.

2. Home upgrades and repairs

(Photo By Tom Williams/CQ Roll Call)

The second most popular reason for taking out one of our loans is to spruce up the home.

With the in-laws coming to stay and friends dropping in – you want your place to look its best. Not to mention that maintaining your biggest investment stops your piece of the Australian dream from collapsing in a heap!

Home repairs and improvements are rarely cheap. But – if done right – they could even add a few dollars to your own bank account.

If you’re heading away for the holidays, you may want to Airbnb the place while you’re away, and have a revenue-neutral break. Come home with a deep tan, a few rudimentary skills in a foreign language, and a healthy bank balance to boot!

3. Car refinance or loan


Holiday season is driving season, so we’re not surprised these loans come in at lucky number three.

You’ve been slogging your guts out all year. It’s time to ensure you and your family can travel in safety and comfort to your dream holiday spot.

Then there are the joys and reduced hassle of owning an up-to-date vehicle – while avoiding the high interest rates of leasing companies.

A new vehicle with a sparkling new warranty also usually means none of the repairs needed to keep an older vehicle on the road. This also saves money right away, and in the long run.

4. Getting Married

STR/AFP/Getty ImagesA Santa Clause joins in as Chinese couples gather for a mass wedding ceremony at a shopping mall in Beijing in 2006.

Christmas time is peak season for getting engaged.

But it might surprise you to know that while weddings held on Christmas day itself are very rare – just 37 on average compared to the average of 326 weddings across Australia per day – more couples are choosing to host their weddings around Christmas and New Year’s Eve.

This makes sense when you consider the festive atmosphere and time off work that the holiday season brings. Family and friends are also often ready to come together during the festive season, so why not give them an even bigger reason to do so?

But whether you are planning a huge set-piece extravaganza, a destination wedding, or even eloping to Vegas to escape all the expense and kerfuffle – not everyone can just reach into their jeans and pay for a wedding. This is where a wedding loan can come in super handy.

5. Assorted consumer durables

Picture: Getty Images

Our “other” category obviously comprises many different items, so we asked our customers for more information.

As it turns out, the majority of our loans in this category are used for consumer durables that are a little bit fun, or a little bit summery.

These include summertime items like jet skis, tinnies (small runabout boats, not beer), and small sailboats to take the kids out on the water in. They also include backyard spas, and solar hot water and power systems (complete with Tesla batteries).

We are delighted to fund purchases like this. No one is getting out of their depth and they get to enjoy the great Australian summer – or save on their power bills – right away.

So, if you’re one of the many Aussies considering getting a personal loan this Christmas, feel free to get a quote from us. This won’t affect your credit rating so there’s no risk on your end.

And then have yourself a very merry Christmas indeed!

Mark Jones is the CEO of SocietyOne, the nation’s first and leading marketplace lender, which passed $500 million in loans last September.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.