When Should You Consider a Wedding Loan?
- Wedding loans can provide couples with cash to pay wedding expenses.
- A wedding loan is usually unsecured debt.
- Wedding loans may be cheaper than credit cards if you can get a low rate.
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Getting married is a life-changing experience and there's a lot that goes into making sure your big day is one to remember. Whether you're planning a gala affair or a more intimate ceremony, there's one big question to consider: How will you pay for it all?
Financing wedding expenses sometimes requires a little creativity. After all, the average wedding costs around $28,000, according to The Knot. Digging into savings is one option; credit cards are another. And some couples consider a wedding loan. Wedding loans can provide you with a lump sum of money to cover expenses, as you prepare to walk down the aisle. But there are some pros and cons to consider before you apply.
What are wedding loans?
Wedding loans are personal loans that are designed to be used for wedding expenses. A wedding loan is typically an unsecured loan, meaning you don't need collateral. You borrow a lump sum of money, then pay it back in installments with interest.
Banks, credit unions, and online lenders can offer wedding loans. Loan terms vary by lender, but it may be possible to borrow up to $100,000 to pay for a wedding.
Which costs to cover with a wedding loan
If you're getting a wedding loan, it's important to remember that you have to pay that money back with interest. Some of the things that you could use a wedding loan for include:
- Deposits
- Venue or reception hall fees
- Officiant's fee
- Apparel
- Flowers and decorations
- Catering
- DJ or live band
- Wedding planner fees
- Photographer or videographer
- Wedding cake
- Rehearsal dinner
- Wedding rings
- Hairstylist and makeup artist fees
- Invitations
- Wedding favors
- Limo rental
Your actual costs will depend on the type of event you're planning and how many people you invite. A bigger wedding usually means a bigger bill.
You could also use part of a wedding loan to pay for a honeymoon, if you're planning to take one.
Pros and cons of a wedding loan
- No need to dip into savings to pay for a wedding.
- Wedding loans may have higher borrowing limits and lower interest rates than credit cards.
- Getting a lump sum allows for flexibility, since you can pay for wedding costs as needed.
- You may have years to repay the loan, which could make budgeting easier.
- Wedding loans can pay for a variety of costs, including the honeymoon.
- Taking out a loan means you're starting the marriage in debt.
- Wedding loans charge interest, so everything you buy or pay for automatically becomes more expensive.
- Monthly debt payments could add strain to your budget.
- Lower rates aren't guaranteed and loan fees can add to your total cost.
- Repaying the debt could mean delaying other financial goals.
If you're considering a wedding loan, know that the trade-off for the short-term benefit of being able to pay for the wedding you want is the reality that you’ll be paying those purchases off, plus interest, over time.
How to apply for a wedding loan
Applying for a wedding loan is not that different from applying for any other type of personal loan. The first step is finding the right lender. We'll share some recommendations for the best wedding loans a little later.
Pro tip: Consider starting with online preapproval with multiple lenders. They typically do a soft pull on your credit, allowing you to compare rate quotes without affecting your credit score.
Once you find a lender to work with, you can move on to filling out the application. Many lenders will allow you to do that online.
When applying for a wedding loan, you'll generally need to include your:
- Name
- Address and phone number
- Email address
- Date of birth
- Social Security number
- Desired loan amount
The lender may also ask you to upload some supporting documentation if you're applying for a wedding loan online. For example, you might need to upload a copy of your photo ID, pay stubs, or bank statements.
Once the lender has all of the required information, they'll review it and either approve or deny your application. If you're approved, you'll be presented with the final loan terms. That's your chance to review the loan details to decide whether you want to go forward.
If you're happy with the loan terms, you can sign off on the lender's paperwork. At that point, the loan funds can be released to you. You may be able to request direct deposit of the loan into your bank account, too.
Wedding loans with bad credit
Having a lower credit doesn't have to be a roadblock to getting a wedding loan. Some personal loan lenders have lower credit score requirements. (Another good reason to shop around.)
Keep in mind, though, that loans for consumers with lower credit scores can be more expensive. The additional cost is a factor you should weigh when you consider a wedding loan and whether it's worth paying it to fund your expenses.
Alternative ways to finance a wedding
Wedding loans are just one option for covering wedding expenses. If you're looking for other ways to pay for a wedding, you might consider:
- Setting aside money in a wedding savings account
- Using rewards credit cards
- Borrowing money from friends and family
- Taking out a home equity loan or line of credit if you own a home
- Lower your wedding day budget
Each one has pros and cons.
Saving in a wedding account, for example, could take a lot longer than you'd like it to, if you're only able to set aside small amounts at a time. Rewards credit cards can help you earn back some of what you spend as points, miles, or cash rewards, but they can have high interest rates.
Borrowing from friends and family may be convenient. But you run the risk of endangering the relationship if you can't pay the money back.
Home equity loans and HELOCs allow you to turn your home equity into cash. However, defaulting on the payments could put you at risk of losing your home to foreclosure.
If you want to avoid wedding debt, then saving up for your dream day may be the better option than loans. You could also consider cutting your wedding costs so you don't have to spend as much.
When to consider a joint wedding loan with your spouse?
A joint wedding loan with your future spouse could work in your favor. Applying together may help you qualify for a bigger loan. Or if your partner has a higher credit score and can qualify for a loan with better terms than what you can get on your own, you might save money by asking your partner to apply with you. A joint loan may feel more fair than an individual loan because you’ll both be liable to pay the bill. Note, however, that in many states, you’ll both be liable for the debt even if only one name is on the loan.
Will a wedding loan hurt your credit score?
When you apply for a wedding loan, you may lose a couple of points off your credit score. As you pay off the loan, on time payments will help you maintain a good credit score. Installment loans don’t count toward your credit utilization ratio, which is an influential factor in your credit score. So all things equal, putting the debt on a credit card may have a bigger negative effect on your credit score than taking a wedding loan.
How much does the average wedding cost?
The average wedding costs approximately $28,000, according to The Knot. The amount you spend on a wedding depends on many factors, including the number of guests, the venue, and how much you plan to spend on things like flowers, decorations, and favors. Planning a destination wedding may or may not be cheaper, depending on where you'd like to travel to and how many guests you invite.