There are 2.5 million weddings expected to take place in the year 2022, making it the most weddings since 1984, according to market research firm The Wedding Report. Shane McMurray, founder of The Wedding Report, told CBS MoneyWatch, “So vendors are taking advantage of higher demand and saying, ‘Let’s charge more,’ which is normal in business with supply and demand.” That includes venues, rings, photographers, videographers, and caterers which is why the average price of a wedding is now $28,000 and pre-2020 it was about $24,000.

According to a recent study, 45% of couples spent more than they planned and the average amount they went over budget was $7,300. In a poll of 1000 people, 33% entered into a type of debt to cover some or all of the costs of their wedding. You can do your wedding for less if you skimp on some of the items listed above or invite fewer people, but no one wants to do that. A better option is to apply for a wedding loan. This article will explain how to do that.

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What is a wedding loan?

Many people find themselves in need of cash for their wedding when they don’t have enough saved up yet or simply want an alternative to borrowing from family members. A good way around this problem is getting a personal loan through one’s bank instead! These types of loans can come with lower interest rates than other sources and be used without risk because there isn’t any security deposit required like what happens if you take out collateral on someone else’s behalf (such as stocks).

How do they work?

Wedding loans are available through online lenders and traditional banks. They are personal loans, so they’re unsecured. That means that applicants will be screened for income, steady employment, and credit report. Interest rates are determined by the credit score of the borrower. Most lenders look for scores that are 670 or above. Financial advisor and wedding loans expert Yalitza Brambila told Brides, “Similar to a personal loan or a credit card, couples looking to take out a wedding loan would have to apply through a financial institution. Lenders use different criteria when considering applicants and most will provide a quote without running a credit check, so I suggest couples shop around for the best loan terms.”

Related Article: How Do Personal Loans Work?

How do I use a personal loan for a wedding?

A wedding loan is a type of personal loan for a wedding, so it can be used for any expenses related to your wedding. You’ll likely receive the loan funds via a paper check or direct deposit into your bank account. Once you get those funds, you can use them as you would any other savings or cash.

You’ll then be required to start making monthly payments to repay the loan and accruing interest on the balance. Be sure you only borrow the amount you need and try not to take out more.

Where do I get a personal loan for a wedding?

Because a wedding loan is a type of personal loan, you can get them at banks, credit unions, or online lenders. Choosing the right place to get one depends on your credit score, income, and other factors that will help you qualify and get the lowest interest rate.

Some online lenders do have loans designed specifically for weddings that may have shorter terms, lower total amounts, or better interest rates. Be sure to shop around, compare lenders and compare personal loans before choosing one and get prequalified when you can to get personalized estimates for your situation.

Cost of a wedding loan

The cost of a wedding loan varies by lender, and can also depend on the borrower’s credit score, credit history, income, other debts, and other factors. Unsecured personal loan rates can range from 3.49% to 36.99%, and the rate will ultimately impact how much the loan costs.

According to The Knot, the average cost of a wedding in 2021 was $28,000. Say you take out a loan for $20,000 with a term of five years and a 6% APR. Your monthly payments would be $386.66 and you’d end up paying $3,199.36 in interest, bringing the total cost of the loan to $23,199.36.

On the other hand, if you have poor credit and the APR was 36%, your monthly payment would be $722.66 and you’d pay $23,359.55 in interest, bringing the total loan cost to $43,359.55.

As you can see, the interest rate you qualify for can have a significant impact on the cost of the loan.

Top wedding costs to consider

Weddings aren’t cheap, though there are ways to save and things to cut back on to keep money in your wallet. Some of the top costs to consider and include in your budget are:

  • Engagement and wedding rings. A 2019 survey from The Knot found the average engagement ring cost is around $5,900, and the average wedding band costs around $1,000 each.
  • Florist. Wedding flower costs can vary, but the average is around $1,500, with most couples spending between $700 and $2,500. Making your own flowers can help cut costs.
  • Decorations. Wedding decorations can range from $2,000 to $10,000 or more, depending on how extravagant you want your centerpieces, decor and more to be. Cut costs by making your own decor, buying used, or renting.
  • Catering. Another expense that can vary greatly, most couples spend between $1,800 and $7,000 on catering. This sometimes includes both alcoholic and non-alcoholic beverages, and can also depend on whether the meals are plated or a buffet.
  • Formal wear. The average wedding dress cost is about $1,600, but buying off the rack or purchasing a used dress can decrease those costs.
  • Musicians/DJ. The national average cost of a wedding DJ is about $1,200, typically ranging from $800 to $1,500. Live bands can cost from around $3,000 to $6,500 or more.
  • Photographer/videographer. These costs can also vary depending on if you get engagement photos, how many hours the photographer is hired for, if a videographer is included, how many images you get, and other factors. This range starts at around $1,000 but can reach $10,000 or higher.
  • Reception and ceremony venue. Most couples spend between $3,000 and $11,000 on reception and ceremony venues, but they can range widely depending on whether catering is included, how many people the venue holds, if the ceremony and reception are in the same place, if a wedding planner is included, and other factors.
  • Wedding planner. On average, a wedding planner costs about $1,800, though higher estimates can be more than $4,000.

Other costs include gifts for the bridal party, hair and makeup for the bride and/or bridesmaids, alcohol, wedding cake, and more.

When it’s right to get a personal loan for a wedding?

If you need money to pay for your big day, taking out a loan for a wedding may make more sense and be more affordable than using a credit card or depleting your emergency fund.

However, you should only consider a wedding loan if you can afford to pay off the debt within the loan’s term. This includes making the monthly payments on time, and taking into consideration that you’ll end up paying more over the life of the loan due to interest. Ensure your income can cover these costs, and you have enough flexibility in your budget to make the payments.

Who wedding loans are best for

Wedding loans are best for people who have good to excellent credit (670 or above) that need financing for wedding expenses. It’s important to have a strong credit score and history because that will determine the APR on the loan.

You should also only take out a personal loan for a wedding if you can afford the monthly payments. Not only do late or missed payments negatively impact your credit score, it can also lead to default on the loan and it can be sent to collections. There are many ways to finance a wedding, including wedding loans, but they are not best for everyone. It’s important to analyze your finances and weigh the pros and cons before making a decision.

Is a wedding loan a good idea?

Whether a wedding loan is a good idea depends on your and your spouse’s personal situation and finances. While a loan can be a better alternative to credit cards as a loan will likely have a lower interest rate, you’ll still be paying more in interest over the life of the loan. Not only can this impact your score when you apply, but making late or missing payments can significantly decrease your credit score and impact your ability to get funding in the future.

Having additional debt can also put a strain on your monthly budget depending on your income and other debt or payments. However, if you can afford the monthly payments and can get a lower interest rate thanks to an excellent credit score, it can be an option for funding your day.

Related: Reasons to get a personal loan

Pros and cons of wedding loans

ProsCons
Low fixed interest rateAccumulated interest
Quick approvalLow approval rates for poor credit
Flexible amountsOrigination and monthly fees
Freedom of useMinimum borrowing amounts

When to consider a joint wedding loan with your spouse

A joint loan can increase the amount you’ll be able to borrow, as long as you both have decent credit scores. Or, if one of you doesn’t have the best credit, it can increase your chances of getting approved for the loan and securing a lower interest rate. Consider this option if just one of you alone can’t qualify for the amount you need, or if your credit score is too low to get a good interest rate.

Keep in mind that depending on the state you live in, debt assumed during your marriage is the responsibility of both of you, and you’re both required to repay it. And, both credit scores can be impacted if the loan isn’t repaid.

Alternatives to wedding loans

You could always borrow the money from a family member or close friend, but that can lead to hard feelings and a break in that relationship if you fail to pay them back. If that’s not something you want to deal with, consider one of the following:

1. Pay for it with a credit card

Most people cringe when they hear this suggestion because interest rates on credit cards can be 20% or more. It’s still an option though, and you can avoid those high interest payments by paying the balance off quickly.

Also, some credit cards offer introductory promotional rates that you can take advantage of for your wedding. Or you could use an existing card and then you won’t have to worry about new monthly obligations besides increasing your payments. Throw in cash-back and travel rewards and it may just be worth it.

The major downside of using a credit card to pay for your big day is, again, high interest fees, as well as any overdraft costs, late payment fees, cash withdrawal fees, balance transfer fees, or fees for using your card overseas.

2. Take out a home equity loan

This is rare for couples just starting out in life because many of them don’t own houses yet. If you do, a home equity loan or HELOC can be more cost effective than a personal wedding loan because interest rates are lower.

3. Borrow against your retirement fund

This is a simple way to get your hands on some cash to get married. Borrow your own money. Most 401(k) providers allow you to take out loans against your retirement funds. Just make sure you put it back at some point.

4. Ask the venue for a payment plan

Venues struggled to book events during the pandemic, so many of them are now willing to work with you if your wedding is a few months away. They’ll do payment plans that make it more affordable.

5. Make a wedding budget

You and your partner need to be meticulous about creating a wedding budget that works with both of your lifestyles. Ask yourselves these questions:

  1. How much do you have in your savings and how much of your savings do you want to use for the cost of your wedding?
  2. Will you have enough money left over for an emergency fund?
  3. How much money from your current income do you want to contribute?
  4. Will your family or friends be contributing to your wedding expenses at all and if so, how much?

Then divide your spending into three categories on a spreadsheet: Estimated, modified and actual. Estimates will be based on costs you have researched, modified will factor in the proposals from potential vendors, and actual is what you will spend. Also include an extras or miscellaneous section for expenses you won’t account for during wedding budget planning or try a wedding budget calculator.

How a wedding loan will impact your credit score

When you apply for a loan, the application will trigger a hard credit check. This decreases your score by a few points for a short period of time (usually one year or less), though it stays on your credit report for two years.

Because payment history makes up 35% of your score, making payments on time will help build your credit. However, making late payments or missing payments altogether can really hurt your score. It’s important to get a loan with payments you can afford to protect your credit.

Wedding loans for bad credit

Getting any type of loan with bad credit is difficult and can be expensive. Most lenders prefer credit scores over 670 to approve applicants. Even at that level, interest rates will be high. Anything lower than that could require a cosigner or may not get approved at all. If the borrower is approved, they should expect to pay double-digit interest on the loan.

Pros and cons of wedding loans for bad credit

ProsCons
Fast money for wedding expensesHigh interest rates
Fixed monthly paymentsLimited borrowing amounts
Loan payments build creditExpensive fees

How do I qualify for a wedding loan?

Qualifying for a wedding loan is the same as qualifying for any other personal loan. The borrower’s credit score, which can range from 350 to 850 on the FICO scale, is the primary factor in being approved and setting the interest rate. It’s best to check your credit score before applying for a wedding loan so you have some idea what to expect.

Set the amount that you want to borrow at a slightly higher number than what you’ll need. There are often last-minute expenses you didn’t plan for. Research several lenders before applying. The next section in this article will outline how to compare them. Once you’ve selected one that works for you, follow the steps below on how to apply.

 

How to compare wedding loan lenders

There are dozens of online lenders and a wide selection of banks and credit unions where borrowers can apply for a personal loan to fund their wedding. Brand recognition is important, but it’s not necessarily going to get you the best deal. The best way to compare them is to start out by asking the following three questions:

  1. What is the interest rate?
  2. What are the terms and conditions?
  3. Is there an origination fee or monthly charges?

Interest rate is important because it determines how much you will pay in total to repay your wedding loan. Do the math. The terms and conditions determine the number of years you’ll have to complete repayment. Remember, interest accumulates during that entire period, so long-term loans are more expensive. Fees and charges are self-explanatory.

Find and compare personal loans for wedding

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Factors to consider when comparing wedding loan lenders

Factors to pay particular attention to when comparing lenders include:

  • APR. Typically, the lower the APR, the less you’ll pay over the life of the loan.
  • Fees. Fees such as application fees, origination fees, prepayment penalties, and others should be compared. On the other hand, some lenders don’t charge any fees.
  • Prequalification. Getting prequalified can give you a unique estimate of your interest rate, monthly payment, and loan term based on factors like your credit score, history, income, and others. This isn’t a guarantee but can help you more accurately compare your options.
  • Convenience. Check out discounts, autopay, same-day funding, and other features.
  • Customer service ratings and reviews. Read what current and past customers have to say about the company and its customer service.

How do I apply for a personal loan for a wedding?

Getting a wedding loan is simple if you have done your shopping and ensured your credit score and budget can help get you the best financing possible.

Fill out the
application
online or in person

Official form of
identification

 

Proof of current
employment
(Paystubs)

Most recent
W2 or 1099

The lender will also make a hard inquiry into your credit before approving.

The bottom line on taking out a personal loan for a wedding

Weddings are expensive and there is a lot of pressure to make them perfect. That is why 3 in 10 engaged couples will take on debt for their wedding. Some of them had to take on debt because of cancellations during the pandemic. According to the same lendingtree survey, 36% of men already took on debt to pay for their engagement ring. This is on top of wedding costs. When the wedding is finally over, 29% of couples will then take on additional debt for the honeymoon. This is why nearly 40% of engaged couples fight about wedding costs during the wedding planning process. A wedding loan can help bandaid some of those costs but it is worth really thinking about if you will be able to pay off this loan in a timely manner. Starting a marriage with major debt is not ideal.

FAQs

Yes, most online lenders and traditional banks offer personal loans that can be used to pay for wedding expenses. The application and approval processes are the same as they are for any other personal loan. You’ll need positive identification, employment verification, your latest W2 or 1099, and will be required to submit to a credit check before approval.

Related: A Wedding Loan or Your Credit Card

Most lenders prefer borrowers with “good” credit, which is any credit score over 670. Anything less than that is considered a “bad credit borrower.” Bad credit applicants can still get a loan, but the interest rate and fees will be higher and payment terms less flexible.

Related: Why a Good Credit Score Matters

Weddings are expensive, and sometimes to plan one of the biggest days of their lives, people may go over budget or find they are not able to afford these expenses. In this case, they would turn to a personal loan to help pay for those expenses. This can be a better option than putting everything on a credit card or draining your savings or emergency fund.

According to The Knot, the average cost of a wedding in 2021 was $28,000. This is a decrease from 2018 and previous years, where costs were closer to $40,000 or more. Expenses include engagement and wedding rings, flowers, decorations, catering, venues, a dress, a cake, and more.

Personal loan amounts vary from lender to lender and can range from $1,000 to $100,000. If you choose a lender with a high loan limit, and you have a high enough credit score and income, you can likely qualify for a personal loan up to $100,000, or however much you need for your wedding expenses.

Personal loans can be used for about anything, including financing an engagement ring.

The biggest expenses for a wedding can often depend on the bride and groom and their preferences. However, some items that can be more costly include the venue, catering, engagement and wedding rings, flowers, and the wedding dress.

While you technically can borrow from your 401(k) for wedding expenses, it’s not at all recommended. Unless you are older than 59 ½, you will be charged taxes and early withdrawal penalties on the amount you take out. Plus, then you are depleting your savings that should be kept for retirement.

Yes, you can pay for a wedding with one or more credit cards. Just be careful to ensure that you can afford the charges. If you carry a balance on your card from month to month, you will begin accruing interest on that balance. Then, you will end up paying even more. This can quickly spiral into credit card debt that can be difficult to pay off.

A personal loan for a wedding can be used for any wedding-related cost including a honeymoon or engagement ring.