The national average cost of a wedding is $33,000. While this may be surprising to many of us, the reality is that weddings are a billion-dollar-per-year industry. When you add up the cost of flowers, bridal party gifts, wedding attire, banquet tablecloths, and the all-important cake, the price tag can quickly escalate to something you hadn’t anticipated.
Most of us do not have that kind of money in savings, waiting for our special day, so we need to find some creative ways to finance our dream scenario. There is a growing trend among couples of taking out a loan to pay for their wedding. If you choose, you can get a loan for an expensive wedding and fulfill all of your wildest dreams. The concept of a wedding loan is quickly becoming a popular option for young couples who want to create a truly memorable and unique experience, and it is now easier to do so than ever, with more lenders getting on board for such an occasion.
What is a wedding loan?
A wedding loan is an unsecured personal loan. If you have acceptable credit, it is possible to take out a loan ranging from $15,000-$40,000 for your wedding and honeymoon costs. Annual percentage rates for this type of loan range from 5 percent to 36 percent, depending on factors like credit score, debt-to-income ratio, and other related factors.
You can get a wedding loan from your local bank, credit union, USDA loans, or online lender. Any lender that charges more than 36 percent interest on a personal loan is likely not reputable; do your homework before signing terms and conditions for this type of agreement.
When you apply for a loan, a lender will take a look at your credit score and debt-to-income ratio to determine your ability to pay back using their terms. Generally speaking, lenders look for credit scores higher than 660 with a debt-to-income of 40 percent or lower to loan money. Don’t just settle for the first financier that will look at you; feel free to shop around for the best deal.
Should you take out a personal loan to pay for your wedding?
When deciding to fund your dream day with a loan, you must take into account your unique situation. When you look at wedding financing, it is essential to search for a loan that fits both your needs and your budget. You must be confident that you can pay back your loan each month; if there are questions as to whether you can make this monthly commitment, you should reconsider whether a loan is the right choice for you.
Are there benefits to securing a wedding loan?
With the acquisition of a loan, you get the money you need to pay for wedding expenses immediately. Many couples who are struggling to cover wedding expenses end up fighting over finances; having a wedding loan helps alleviate some of that financial stress that leads to wedding day strife.
If you know that you will be able to handle a monthly payment post-wedding, perhaps it’s best to fit that into your new family budget. Focusing on the details of your special day, rather than how you are going to afford to pay for them is going to bring more joy to the process of planning.
Are there drawbacks to getting a loan?
There is a downside to obtaining a loan. First of all, planning your wedding on borrowed money means that you’ll be starting a life together in debt. If you have the means to pay for the monthly expense, by all means, proceed with the loan. On the other hand, if this is going to cause additional financial strife, think twice before signing on the dotted line.
It is easy to lose sight of your proposed budget when you have extra money sitting in your bank account. Things could quickly spiral out of control if you start saying yes to every option for upgrading products and services, and you might find yourself maxing out the loan and still coming up short when it comes time to pay the caterer.
If you choose a loan, you’ll have to be disciplined and stick to your budget. It is possible to take out a wedding loan and budget in the monthly cost so that you and your spouse can truly have the magical day that you’ve dreamed about. Keeping a close eye on your budget as you begin your life together will help to facilitate the luxurious experience you’ve conceptualized for so long.
Planning a budget and sticking to it
Most couples need help planning a budget and sticking to it; with so many tricks and trappings in the wedding industry, it can be challenging to keep the purse strings tight when you want the best for your special day.
Making a list of what you would like to spend, as well as a list of your expenses, will give you a clear picture of what you can afford to pay for your big day. While it might be wonderful to have that designer dress from Vera Wang, it is conceivable that you might find one on sale that takes your breath away. Take your time, and look around for the best deals. Keep accurate records of revenue versus expenses, and you’ll be more likely to fund your wedding guilt-free.
With some options for funding your special day, it’s time to rally the troops, start planning, and celebrate each step along the way. Good luck with your wedding journey!