Wedding Loans – Why & How to Get One
Wedding loans are personal loans that are used to cover wedding expenses. While convenience may convince some to get a wedding loan, others may want to consider factors such as paying more in interest and causing stress on a new marriage. Personal loans can have lower interest rates than alternative financial products, but alternatives do exist.
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UPDATED: Jun 4, 2021
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- A wedding loan is a type of personal loan that covers wedding expenses
- The pros of wedding loans include convenience, fast and easy application, lower interest rates, and potential credit improvement
- The cons wedding loans include interest, extra debt, and relationship stress
- Alternatives to a wedding loan include credit cards, home equity loans or lines of credit, and saving up
Wedding loans don’t exist as a financial product. Instead, it is a personal loan that the borrower uses to cover wedding expenses.
While they can be beneficial, they also have their disadvantages. Read more about the pros and cons below and see what alternatives you have.
If you’re searching for wedding loans, compare rates from lenders in your area by entering your ZIP code above.
What is a wedding loan?
A wedding loan is a type of personal loan that you can use to cover wedding expenses. According to a study done by The Knot, the average wedding cost in 2019 was $33,900.
With wedding loans, you may have the option of financing at least part of your wedding and making payments instead of saving up all the money you’ll need before getting married.
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What are the pros and cons of a wedding loan?
The pros of wedding loans are:
- Convenience – Wedding loans can be used to pay deposits for vendors, meaning you won’t have to save a large amount of money or delay your wedding because of a lack of funds.
- Relatively fast and easy to apply – After gathering your financial documents, some online lenders have applications that take only a few minutes to fill out. Approval can take less than a week, and funds are deposited into your bank account.
- Lower interest rates – Compared to other financial products, such as credit cards, personal loans can have lower interest rates for people with good credit.
- Potential credit improvement – If you make your payments on time, you may be able to use your loan to improve your credit.
The cons of wedding loans are:
- Interest – When you use wedding financing, you’ll have to pay extra in terms of interest rather than the fixed price you’d have to pay when paying with cash.
- Extra debt – During qualification and underwriting, lenders will evaluate how much debt you can afford. If you already have other loans, you may not qualify for a personal loan, and if you get a personal loan, you may not be eligible for an auto loan or a mortgage.
- Relationship stress – With a wedding loan, you will be starting off your marriage with debt, which could cause stress on the relationship if you’re worried about how to eliminate wedding debt.
Weddings loans can be beneficial for some people, but others may want to consider alternative financing options.
What are the alternatives to wedding loans?
Alternatives to wedding loans include credit cards, home equity lines of credit, and simply saving up.
Credit cards may be a more expensive financing option since they may have high interest rates, but you may also qualify for a 0% promotional period.
You may also be able to earn rewards, such as flights and hotels. However, you should try not to spend money that you don’t have.
If you own a home and have significant equity in it, a home equity loan or home equity line of credit may be an option for wedding financing. However, if you default on the loan, the creditor could seize your home.
One of your last options is to save up the money. While this means you may have to extend your engagement, it means there’s less chance of you going into debt for your special day.
If you’ve decided that a wedding loan is right for you, enter your ZIP code below to compare rates from lenders near you.