A wedding is a day of celebration and everybody wants their wedding to be memorable and to mark the beginning of you and your partner’s life together. You will want to have a beautiful setting and some great food to help set the mood and share it with friends and family.
However, weddings are expensive and you may not have the money to throw into such a day, but does that mean you should get a loan to pay for your wedding?
Many people do borrow money for weddings, but it does carry risks. So, let’s look at what it means to get a loan for your wedding.
Should You Get a Wedding Loan?
If you decide to take a loan to pay for your wedding then it means that you will go into debt and you will then start your married life in debt, which could cause problems down the road. You want to then get off on the right foot and not have the financial stress that comes with borrowing money.
Ideally, you want to start by building a future with your spouse, for instance, you could save for a home or save to have a child in the near future, start a retirement fund and so on. Those monthly payments that you are paying towards a loan could be used to build your savings.
If You Decide to Borrow
If you do decide to get a loan for your wedding then you need to borrow wisely. The majority of loans, even if they are marketed as wedding loans are just personal loans. This means you will not need to pledge collateral against the loan and your income and credit score will influence whether you will get the loan.
You will then need to check your credit before you apply for a loan to make sure there are no errors or negative marks.
If you have bad credit or not enough income to qualify for a loan then you and your spouse could co-sign for a loan. This means that you both equally share the responsibility for the loan and its repayment. This would make you equal partners with an equal responsibility, but if something goes wrong then you will both end up with bad credit.
If you want to get the best terms then you need to look for a loan that has these characteristics.
Firstly, you need to get an unsecured loan so that you do not need to put up any collateral, which means you won’t lose your car or home if you fail to repay.
Secondly, it is a good idea to get a short term loan as the term is shorter, you will pay less in interest over the life of the loan. You are then able to get the loan done and dusted with sooner.
Lastly, with a fixed interest rate loan, you will know what you will have to repay each month, which then makes it easier to budget for the loan repayment.
Where You Can Borrow
If you want to get the best rates then a personal loan from a bank or an online lender are the best places to look.
You can also consider a peer to peer lender as they generally offer short term loans with competitive rates. However, if you don’t think you can pay this loan off in a few years then another option might be best.
Credit cards are a risky option to fund your wedding. Credit cards are easy to use but they can easily get out of control. If you have good credit and a plan in place to pay off your loan in 6 months to a year then you could opt for a 0% interest credit card, where you won’t pay interest for a certain period of time, but if you fail to repay the balance within in this time then you will start paying a high interest and may get in over your head.
Wait…You might want to explore some other options…
Alternatives to a Loan
Here are some alternatives to a loan that you could consider to pay for your wedding. If you don’t have the funds to pay for your dream wedding then something will have to give.
Budget and Save
Unless you are getting married in the next month then you will have some time to plan and start putting some money aside to pay.
You should pay for what you can yourself and save. This will develop a good habit for you and your spouse in the years to come.
Family and Friends
There are some people that might feel embarrassed to ask family and friends to help pay for their wedding, but if you are not one of these people then think of creative ways to get help. The simplest way would be to ask for money and crowdfund the wedding.
Another way though would be to ask family and friends to offer their time, skills and other resources. You might know someone that has a beautiful property, for instance, that you could use for your big day, or maybe someone is a chef or you have a great photographer friend. There is no shame in asking for help and your friends and family will be more than willing to help.
You could hold off on buying an expensive ring and rather start with something that you are able to afford right now and then upgrade later in life like on an anniversary.
Make Cut Backs
You may have to make difficult decisions about your wedding day. You may consider inviting fewer people or make the event more modest. You could have a cash bar instead of an open bar and so on. Your guests will remember the feeling of your wedding and you being happy not the specifics.
You can take a personal loan to help pay for your wedding, but you and your spouse need to know the ins and outs and make sure that you will be able to pay it off once you are married and not let it lead you down a road where you will drown in debt.