Wedding loans: How to finance wedding costs

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Whether you’d like a large, extravagant wedding or a small, casual affair, you’ll have to figure out how to pay for it. A wedding loan may be a good option if you lack the cash to pay for your wedding up front.

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

What is a wedding loan?

A wedding loan is a type of personal loan marketed toward engaged couples who are planning weddings they can’t afford to pay for with cash. These loans are easy and quick to apply for; many lenders will even approve you online in a few minutes.

Some couples may use a wedding loan to finance certain parts of their big day, such as upgrading catering options, while others will use financing to pay for the whole event.

The interest rates on these loans vary. Some are lower than credit cards, making them more attractive to couples, but others may go as high as 30 percent.

When does a wedding loan make sense?

It’s easy to get carried away planning the wedding of your dreams, especially with the constant influence of social media platforms such as Instagram and Pinterest. But don’t take out a wedding loan to inflate your total budget just because you can. When deciding whether to take out loans for wedding costs, think about how important it is to have the extra budget.

If financing your wedding is necessary to invite important family members and loved ones, it could make sense. If all you’ll be missing out on is a donut wall and custom handwritten invitations, you should think twice about whether you can simply reduce costs to fit your budget.

Since wedding loans are unsecured, you don’t need to put anything up for collateral. That’s the good news. But it also means that lenders are pickier about who they give loans to, so you’ll need a fantastic credit history to get a decent interest rate. If your credit score isn’t quite where you’d like it to be, you might end up with a significantly higher interest rate than you’d get through alternative financing options such as a credit card.

Pros and cons of wedding loans

Consider these benefits and drawbacks of taking out a wedding loan.

Pros of wedding loans

  • They’re unsecured loans: Since wedding loans are unsecured, you don’t risk losing your house, your car or any other asset you own if you’re unable to repay them.
  • Soft credit checks: Lenders that offer wedding loans often allow you to prequalify so you can see the loan offers at your disposal without hurting your credit.
  • Potentially lower interest rates: Compared to credit cards, interest rates for wedding loans are usually lower and can save you thousands of dollars.
  • Longer repayment terms: Most wedding loans offer repayment terms of three to five years, so you can take your time paying your wedding off.

Cons of wedding loans

  • Involve taking on debt: Wedding loans can steer you into a serious cycle of debt, especially if you already have other debt.
  • Interest rates can be high: If you don’t have a good credit score, you may have to settle for a high interest rate that can increase the overall cost of your loan.
  • Can lead to unnecessary spending: Wedding loans may lead you to spend on upgrades and extras you wouldn’t consider if you paid for your wedding with the cash you have on hand.

How to apply for wedding loans

To apply for wedding loans, follow these five steps.

1. Check your credit

Figure out where your credit stands. To do so, check your credit score. If you don’t have the best credit, you may want to improve it before you apply for wedding loans. This can boost your chances of being approved and get you lower rates, which could save you thousands of dollars.

2. Shop for lenders

There is no shortage of wedding loan lenders. You can find them with online lenders or at various banks or credit unions. Check each lender’s credit requirements and loan rates and terms so you can determine which ones are a good fit.

3. Get prequalified

Many lenders offer a prequalification process that won’t impact your credit score and can give you an idea of the loans available to you. To prequalify, you’ll need to fill out a short form with your personal details.

4. Compare offers

Closely compare the wedding loan offers you receive. Consider interest rates, terms and fees. Choose the most favorable option that will save you the most money.

5. Apply

Once you decide on a wedding loan, complete the formal application. Most lenders offer quick approval for qualified applicants and typically deposit funds within a few business days or even 24 hours.

Alternative wedding financing options

If you don’t want to take out a personal loan to pay for your wedding, consider these alternatives.

Credit cards

Some credit cards offer introductory 0 percent APR for a set amount of time after you open the account, meaning you have time to pay off the balance without being charged interest. This is a great way to pay for vendor deposits and other immediate costs you can’t cover right away but plan to pay off in the next few months.

Personal savings

Try saving for a few years before a wedding. Dipping into any savings account you and your betrothed have can actually be better in the long run when you don’t have to pay interest on loans or credit cards used to finance a wedding.

Help from family members

Some family members may be willing to help you pay for a wedding. If a family member wants to help foot the bill for the big day, this is a good way to finance a wedding without having to get a wedding loan, use a credit card or dip into your own savings.

Tips to save for your wedding

Here are some ways you can save for your wedding.

  • Earn extra income: Think of ways to earn extra cash, such as starting a side hustle, selling items you don’t want or need or getting a part-time job.
  • Create a budget: Look at your monthly income and expenses. Then, come up with a budget that works for your lifestyle needs and allows you to save for a wedding.
  • Take advantage of credit card perks: Many credit cards offer rewards such as cash back and points that you can redeem for airfare, lodging, gift cards and more.
  • Automate savings: Arrange for some of your paycheck to automatically go into your wedding savings account. This can allow you to save without much thought or effort.

Tips to save on wedding costs

If you find yourself turning to wedding loans to finance a large portion of your wedding, stop to think about whether there’s any way you can trim costs without sacrificing the important parts of your big day.

Here are just a few ways to bring the price down without putting yourself into debt:

  • Pick an off-peak day such as Friday or Sunday.
  • Limit open-bar offerings to wine and beer.
  • Design and print your own invitations.
  • Host the ceremony and reception in the same location.
  • Choose a minimalist wedding cake.
  • Replace flowers with candles.
  • Buy a wedding dress that doesn’t have a lot of embellishments.
  • Limit professional photography to a few hours.
  • Use standard place settings and linens.
  • Serve a buffet-style dinner.

Get pre-qualified

Answer a few questions to see which personal loans you pre-qualify for. The process is quick and easy, and it will not impact your credit score.

The bottom line

With the cost of an average wedding steadily climbing, fewer people are able to finance their big day out of pocket. Wedding loans are becoming more widely available due to demand, and may offer more favorable interest rates than credit cards and other financing options.

But before you put yourself into debt, consider whether you really need to finance wedding costs or if you can reduce the total price by making a few small sacrifices that won’t really affect your guests’ experience. You can still have the perfect day without spending a fortune.

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