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3 Top Loans for the Holiday Season

While paychecks aren’t getting larger for many Americans, holiday shopping lists also aren’t getting any smaller. How do you make your gift-giving ends meet?

One way to approach your list of presents this year may be a personal loan. If you qualify, you can find low rates, often better than most credit cards.

What are you looking for this holiday?

Here are just a few of the things our Facebook friends are looking for:

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Let’s take a look at some of the best offerings out there for holiday shoppers, when it comes to personal loans.

Shopping Boost: 3 Best Bets

Holiday-shopping loans can be a way to put a little cheer under the tree, even if money on hand is tight. If your credit score is strong enough, personal loans can reap lower interest rates than credit cards. Here are some of the best bets among the many available products.

1. Lending Club: With rates that start at about 6.78 percent, no prepayment penalties and no hidden fees, this mainstay of the peer-to-peer lending market can create loan amounts as low as $1,000 (and as high as five figures). The Better Business Bureau gives them an A and the process to apply is fairly simple. The company does a credit check on applicants, verifies banking info and then assesses a one-time fee (1.11%–5%) depending on the amount you’re seeking to borrow.

2. Prosper: Like the first entry on our shortlist, this is a social lending firm. Loans start at $2,000 and bring in an interest rate as low as about 6.59 percent. The service's starting one-time fee ranges from 0.5% to 4.95 percent. As with Lending Club, rates and fees are dependent on your credit score and the amount of the loan for which you’ve applied. With this option, you can borrow between $2,000 and $25,000. The Better Business Bureau gives them a B+.

3. Bank Loan: Another option is to look to your own bank. While the average credit card APR has hovered near the mid-teens all year long, the average APR for bank-offered personal loans have been advertised as low as 4.9 percent You’ll need solid credit and a great offer to get that low — and if you can secure the loan with an asset (such as a house or car), you’ll likely get a lower rate, still — but anything under 13 percent is still a deal over swiping your plastic. As always, pay attention to upfront and annual fees, and make sure that if you take a personal loan from your bank, you’re not penalized for paying it off quickly.

The key to all three of the above options is a steady and uninterrupted schedule of repayment. You don’t want your rates to skyrocket because you’re late on one monthly bill, and you don’t want your home or car on the line just to satisfy your well-meaning urge to make the season a happy one.

That being said, if you proceed carefully, and keep to your payback plan, a personal loan can supply you with a holiday boost at a rate lower than credit cards tend to offer.