You’ve finally found the perfect person. You’ve both decided to make it official and get married — congratulations! This is a huge milestone in your life, and you, of course, want to celebrate the occasion with your friends and family.
But before you get caught up with wedding plans, you need to take a step back and consider how you’ll pay for that extravagant party. According to The Knot, a leading planning website, the average wedding cost $33,931 in 2018, and that number doesn’t even include the expense of a honeymoon.
Few couples have that much money stashed away in the bank, and your family may not be able to help with the cost. Before you give up your dream ceremony or turn to credit cards, there’s another financing method to consider — a wedding loan.
What are wedding loans?
Wedding loans are a form of a personal loan. Lenders designed them specifically to pay for wedding-related expenses, such as the dress, invitations, flowers, and renting a venue.
Wedding loans are unsecured, meaning you don’t have to put up any property as collateral. Instead, lenders will look at your credit score and income to decide whether or not to issue you a loan and to determine what interest rate you’ll receive.
Benefits of wedding loans
Using a wedding loan to pay for your ceremony and reception instead of a credit card can be a smart choice. Wedding loans have the following benefits:
1. Low interest rates
If you have good credit and a stable income, you could qualify for a loan with a low interest rate, helping you save money.
As of August 2019, the average interest rate on a credit card is 17.14%. By contrast, the average interest rate on a two-year personal loan is just 10.63%. Using a loan instead of a credit card could allow you to save hundreds or even thousands of dollars.
2. Fixed repayment terms
When you take out a personal loan to pay for wedding expenses, you can pick a repayment term that works for your budget. Wedding loans can have repayment terms as long as seven years, giving you plenty of time to repay the loan. You’ll pay more in interest over a longer loan term, but you’ll get a lower monthly payment and have more breathing room in your budget.
3. Quick cash access
With a wedding loan, you can get your money in as little as two business days. That perk can come in handy if you need cash to put down a deposit or pay for necessary expenses.
What to consider before applying for a wedding loan
Wedding loans offer quick and convenient access to the money you need to pay for your big day. However, you should use caution before applying for a loan.
Before taking out a personal loan, make sure you come up with a budget for your wedding expenses and identify areas where you can cut back. If you’re willing to compromise — such as by using in-season flowers instead of imported roses or serving cake rather than multiple dessert options — you can save a lot of money and reduce how much you need to borrow.
If you decide that a wedding loan is right for you, choose a repayment term that works for your budget. You want to make sure you can comfortably afford the payments, or you could add stress to your new marriage.
Applying for a loan
Now that you know how a wedding loan works, you can shop around for the best options. It’s a good idea to get quotes from multiple personal loan lenders so you can get the lowest rates and more favorable repayment terms.
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