The national average for the cost of a wedding in the US sits just below $34K. That's a lot of cash for most couples for just one day, but it's essential to keep in mind that the size of your wedding budget is not what makes the day great.
What is important is that you create lasting wedding day memories surrounded by beloved friends and family. Fortunately, it's possible to enjoy the happiest day of your life on a modest budget.
You will need at least some cash, but draining your bank account of every cent you own to pay for your wedding is not ideal. And whipping out your credit card could mean you pay more than you can afford in interest.
The excellent news is personal loans are another option that could help you create your dream day without the risk and excessive interest associated with other forms of personal finance. Compare personal loan rates
via platforms like ROSHI to check your options but before committing to a personal loan contract, it's always good to know what you are signing up for.
What Are Wedding Loans?
We should clear up any confusion by telling you right now that there is no such loan classification as a "wedding loan." If you walked into a bank to ask about them, they would probably look at you sideways.
A wedding loan is simply a personal loan you take out specifically to finance your big day.
You would be hard-pressed to find a financial adviser who would recommend going into debt to pay for a wedding, mainly because it's highly likely the couple is trying to spend money they don't have.
Still, a personal wedding loan may help you avoid the excessive interest of a credit card. So, if you are absolutely set on paying for all or part of your wedding with a "wedding loan," here are a few ways to go about it.
How Much Can You Borrow for a Wedding Loan?
Personal loans typically range from as little as $1,000 to $50,000. Online companies offer three to five-year terms with decent interest rates and no prepayment penalty. Try a company called Upstart or find one with similar terms, and select a term and an amount you know you can comfortably pay every month.
Have Your Financial Documents Ready
You won't get a loan without the bank poring over your financial documents in some detail, so you may as well get all your paperwork organized before trying for a wedding loan.
Loan managers will want to see bank statements, proof of income, student loans, car loans, mortgages, and any other debt you may have outstanding. The bank might consider credit cards as debt, even if you are fully paid up. It's relatively easy to drain your credit card and put yourself in even more debt you can't handle after you successfully apply for a wedding loan.
Get Your Finances In Order
Banks can be cautious about who they loan money, and a personal loan to pay for a wedding may receive some extra due diligence. When you buy goods and chattels with loan money, at least the bank will have some collateral for securing the loan. However, a wedding doesn't leave them with anything to repossess, hence the additional scrutiny.
A good credit score will increase your chance of success, so try to keep it above 700. Loans are possible with lower scores but expect the bank to load you up with higher interest rates due to the perceived extra risk.
Wedding Loan Pros and Cons
If you can qualify for a personal loan, you can take out a wedding loan, but you should always arm yourself with the pros and cons:
Wedding Loan Pros
● Personal loans are relatively easy to get approved
● They are convenient as most financial institutions offer them
● Fast access to your money
● Some won't penalize you for prepayment (early payout)
● You can boost your credit score
Wedding Loan Cons
● There's no getting away from it; you will still pay interest
● All that cash could burn a hole in your pocket and cause you to spend more
● You could face challenges getting approved if you have existing debts
● Starting a marriage in debt could put a strain on the relationship later on
We understand how tempting it can be to go all out on your big day, but remember, surrounding yourself with the people you love is what matters the most. Your friends and family will be happy to share your special day with you no matter how much you do or don't spend. Get a wedding loan with ROSHI if you must, but make sure you don't put yourself into a years-long debt trap for what is essentially a one-day celebration.