The Money Advice Service (MAS) said one in 40 (2.44%) people surveyed for its research, equating to around 1.2 million across the UK, is thinking about turning to a payday lender to fund their seasonal spending.
One third (32%) of consumers also said they will ramp up their credit card debts to pay for the festivities, while one in every 11 (9%) people said they are still paying off what they owe from last Christmas.
The findings also suggest that people will try to curb their spending compared with last year. People typically expect to spend £487 this Christmas, which is £21 less than when similar research was carried out in 2012.
Two-fifths (38%) of the 2,000 people surveyed this month said they are already worrying about how they will cope with the costs.
The findings follow a round of inflation-busting price hikes recently announced by energy companies which will add to the strain on household budgets as wages continue to stagnate.
New curbs proposed by the Financial Conduct Authority (FCA) will force lenders to place "risk warnings" on their promotions and advertising, urging consumers to "think" before taking on a payday loan. The watchdog has powers to ban adverts if it thinks they are misleading.
Lenders will only be allowed to roll over a loan twice and they will only be able to make two unsuccessful attempts to claw money back out of someone's bank account under the proposed new rules, which will come into force next year.
Consumer group Which? recently called for tougher action to clean up the whole of the consumer credit market, after research it carried out found going overdrawn with your bank can be as "eye-wateringly" expensive as taking a payday loan.
The research carried out by the MAS, an independent body set up by Government, found that pressure to please other people and loved ones was the top reason for people overspending at Christmas, followed by wanting to give children the perfect Christmas and being tempted by special offers.
Jane Symonds, head of service delivery at the MAS, said: "Christmas is an exciting time to catch up with family and friends but can also be a worry financially, and very stressful if money is tight."
The MAS has a guide to help people plan their Christmas budgets at www.moneyadviceservice.org.uk/christmasplanner.