Wedding planning can be both exciting and stressful for many couples. Considering all the costs involved, the wedding of your dreams can quickly become unaffordable. You may be able to relieve some of the financial pressure by taking out a wedding loan.
You can easily spend tens of thousands of dollars on a dress, tuxedo, venue, and catering for your big day. According to The Knot Weddings Study, the average wedding cost was $28,000 (excluding the engagement ring) in 2021.
What Is a Wedding Loan?
A wedding loan is a personal loan that can help you finance your wedding expenses. These loans can be used to pay for the wedding venue, catering, attire, photography, and even the honeymoon.
The advantage of a wedding loan is that it allows you to spread the cost of the wedding over some time, making it more manageable to pay for all the expenses associated with your big day.
Pros and Cons Of Wedding Loans
- May have lower interest rates than credit cards
- Get access to the funds you need for your wedding
- Borrow from a wide range of loan amounts
- Increased the likelihood of going over budget
- Possible fees
- Increase in debt
- Lower interest rates than credit cards. Lenders typically offer lower interest rates on loans for large purchases, such as weddings. If you can secure a low-interest rate on your loan, this could save you money in the long run.
- You can get the funds you need for your wedding fast. Taking out a loan can help you pay for your wedding. In some cases, lenders can deposit your funds the next business day into your bank account
- Borrow from a wide range of loan amounts. Depending on the lender you can borrow from $100 up to $50,000 with a personal loan for your wedding
- Increased the likelihood of going over budget. With a personal loan, you may be able to borrow up to $50,000. While this may be helpful for covering all your expenses, some borrowers may be tempted to spend more than they should.
- Possible fees. Some lenders charge origination fees when you take out a loan. An origination fee is a one-time fee charged by the lender to cover the cost of processing your loan application.
- Increase in debt. Choosing a longer repayment term for your wedding loan could mean that you will be in debt for an extended period while paying off the loan, potentially delaying other financial goals.
How to Get a Loan for a Wedding
To find a wedding loan that works for you, follow these steps:
1. Check Your Credit Score
Before applying for a wedding loan, it’s important to take the time to look into your credit report. You can do this by visiting AnnualCreditReport.com and requesting a free credit report. Be sure to thoroughly check it for any inaccuracies or contact the credit bureau for any mistakes.
Knowing your score will also give you an idea of what types of interest rates you can expect and how much loan money you may qualify for.
2. Get Prequalified
Provide financial information to see if you’re eligible for the loan and what terms would be associated with it. This process is usually limited to a soft credit inquiry, so you won’t negatively impact your credit score by prequalifying with multiple lenders.
3. Compare Lenders
When deciding on the best lender for your wedding loan, it’s important to consider a few factors.
- A low-interest rate will ensure you save money in the long run, so always look for the lowest rate possible when comparing lenders.
- Fees should also be weighed – see if any lenders offer no origination fees and waivers of late and insufficient funds charges.
- Loan terms – shorter repayment plans with higher monthly payments mean less money spent on interest over time.
With so many variables to consider, it pays to shop around and compare lenders carefully before making your loan decision.
4. Apply with your chosen lender
Once you’ve selected the right lender, you can begin applying for your personal wedding loan. Despite pre-qualification, lenders can still check your creditworthiness through an application.
Generally, lenders approve applications the same day they are submitted, although you might need to provide additional documents or answer follow-up questions depending on your lender.
5. Recieve your money
The funding process varies from lender to lender. The deposit of funds into your account can occur on the same day, within a day or two, or even over a week.
Financing your wedding with a loan can be affordable and stress-free, but it’s important to ensure you are being smart about the process.
Before diving into wedding loans, check your credit score, get prequalified, compare different lenders, and find out what terms are available.
USA Finance is here to help you find the perfect loan for your special day – look at our options today!