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Loans gain popularity during holiday season

Jan 03, 2013 Quinn Thomas

End of the year festivities can often mean loans and debt for many consumers struggling to buy holiday gifts for their loved ones.

Short term loans that consumers can take out for some extra spending cash are common during the month of December. Many online companies have sprouted up offering such services, and even take on seasonally-appropriate names such as a “Yuletide loan service” or “stocking filler loan.” These options are tempting for shoppers, as they can apply online and receive almost instant approval and money within a day. No credit score reviews are required, which pleases consumers.

Lending is a big business in places such as Texas and Alabama, because these states don’t cap their loan fees.

"It is imperative that consumers perform due diligence when shopping locally or online for a small, short-term loan to ensure that the company they are doing business with is a licensed, reputable institution," Rob Norcross, spokesman for the Consumer Service Alliance of Texas, told NBC.

Because of this, its important for lenders to prove their reputability during the busy winter season. Beyond being licensed and acting professional, lenders should make sure their identity verification tools are up to date and seek public support from those who use their service, via social media or advertising.