If you have a vision of what you want your wedding day tp be like then you’ve probably begun researching the many aspects and costs. And, if you’ve begun tallying up those costs you may be wondering how to pay for your wedding. The good news is that there are options. The not such good news is that some will leave you in debt before you begin your married life.
Key Facts:
- The wedding industry is huge and the average wedding is costing from $19,000 to $33,000 but for some that’s not even half of it!
- The wedding of your dreams can come in many shapes and sizes
- Paying for your wedding can include a combination of loans including credit cards, personal loans and borrowing from friends and family.
- Many couples wait a bit longer in order to save up enough to pay for the wedding
Paying for Your Big Day
Obviously, taking out a loan to pay for your wedding is nobody’s first choice but if that’s what it’s going to take to make it happen that’s your choice. If you make a plan upfront of how to repay any borrowed money and stick to that plan then it could be your best choice for getting your day the way you want it.
Are Wedding Loans called ‘Wedding Loans’?
Good question. There aren’t any official ‘wedding loans’ but there are personal loans or payday loans. As long as you are approved for a loan then you are good to go. These types of loans do not restrict how you spend the money you borrow so can fund anything from your wedding, home improvements to a new car.
Whenever you consider taking out a loan, always look at all your options before committing. Applying for a loan means you’re asking for money to spend that you currently don’t have. In addition, this is money that you have to pay back or risk damaging your credit history.
Marriage Loan Pros & Cons
So, is taking out a loan to fund your marriage a good idea. Read our pros and cons below to help you decide:
Wedding Loan Pros
- A wedding loan can help you make down payments on venue, gowns, caterers etc.
- Getting a payday loan or personal can be quick. Sometimes you can have the money in your bank within hours of applying or by the next business day. This is true especially if you use an online application process with a broker like Funding Zest. You get instant online approval so you don’t have to go from lender to lender wasting valuable time which better spent planning your wedding.
- Personal loans generally offer lower rates than your credit cards will. Particularly when your credit score is good and a credit history shows a record of repaying credit. It’s a good idea to pre-check your credit score so you know the likelihood of approval upfront.
- If you find you can pay off your loan early due to cash wedding gifts or help from family and friends many of these loans don’t have early repayment fees. Check the wording on your contract before you sign because pre-paying the loan can save you a lot of money in interest. Therefore you want to have that option.
- When you do follow your repayment plan and pay off your loan on time or even early this helps you build a good credit history as a married couple. In turn, that means that you have a better chance of getting approval for future loans for a new home or prepping for new baby expanses! Remember a better credit score mean lower interest rates and terms so a long-term savings.
Wedding Loan Negatives
Using a payday or personal loan to consolidate debt can be a good move if you need to consolidate debt. Using one to pay for one big day may not be. This kind of debt could affect your marriage’s finances for a long time to come.
- Depending on the interest rates and terms you receive, you could be paying off your wedding loan for years and years.
- If you don’t have a good repayment plan or ignore it altogether your loan repayments could bring a huge amount of financial and personal stress to the marriage.
- If you are still paying off your wedding loan when you try to get a home loan it will be more difficult or impossible. Lenders look at the amount of existing debt when they consider your loan approval. If they do approve your loan the interest rates could be much higher and/or they may lend you less than you asked for or worse still, deny you the loan.
- You will receive your loan as a lump sum in your bank which is great. But, seeing that large balance may give you a false sense of security i.e. thinking you have so much money. This could in turn encourage you to spend even more money so keep an eye on the budget.
More Option to Pay for Your Wedding
Home Equity Line of Credit
If you already own your home or your parents own one then a home equity line of credit can be extended. This one isn’t such a great idea for parents as they may be close enough to retirement that they’ll need this money.
If you’re thinking of a destination wedding then you should read: Paying for Your Destination Wedding
Credit Card Funded Weddings
Yes, you can fund part of your wedding with credit cards but watch out for those high interest rates and the real possibility of getting into out-of-control debt. Your interest compounds month by month and can grow exponentially before you know it.
Having said that, there are a couple reasons that using credit cards to pay for your wedding makes sense. Credit cards protect you from fraud and help you accrue points for holiday flights and hotels. So, as long as you have the cash in the bank to pay off your cards in full each month using them makes sense.
Save Up for Your Wedding
Wait a bit longer to save up and avoid loans altogether.
Scale it Back
You may have a vision for your perfect wedding but there are always options on how to produce it. So many couples are planning DIY weddings and saving on aspects that traditionally are hugely expensive. Pinterest is always such a great resource for fun wedding ideas.
Quickest Way to Get a Wedding Loan
- Have all your documents ready i.e. proof of income, job details, i.d. etc.
- Use an online broker like Funding Zest that will do that legwork for you to find a lender most likely to extend you a loan with the best loan terms possible
- Pre-check your credit score. If you find it’s not so great do these simple things to boost it today.
Bottom Line
You deserve a special day and you have options. Make a budget to stick to that includes your repayment plan. Check out all the ways you could ge the funds you need before you go for a personal loan.
