Getting engaged is a really fun and special experience. Deciding that you want to commit to one person for the rest of your life is an incredible decision. Now that the engagement is official, you are faced with the monumental task of planning and paying for the wedding. Most couples do not have a wedding cash stash hidden away somewhere, so they often find themselves faced with some decisions: to save and pay cash, to put off the date for a while longer, or to get loans for wedding expenses.
None of these options are necessarily good or bad because all three come with consequences. Saving and paying cash for a wedding is smart but it will require watching what you spend and cutting down where you can. Putting the date off means, well, putting the date off. And loans have to be repaid. The question is which of those consequences are you willing to live with.
It’s important to know that a wedding loan is simply a personal loan used for wedding expenses. So, to Debt or not to Debt. That is the question…
Wedding Loans to Help You Budget
In a perfect world, we would all have every cent we need and want. Sadly, this is not a perfect world, so we sometimes have to work a little harder for things. Other times, we have to borrow for those things. You have probably heard of getting loans for wedding expenses and you may be tempted to jump up and run to get one. Let’s slow down for a minute though because that decision will affect you for long after you sign the paperwork.
Marriage is a great thing. The union, commitment, and love between two people getting married seems like a strong, unbreakable bond. Did you know that up to 21% of divorces are caused by financial issues? Here is the kicker: about half of those divorces lead to even greater debt and lower credit scores.
That is a big percentage, so you really need to weigh out your options when it comes to getting loans for wedding expenses. It would be quite sad and very ironic for the debt you gain paying for the wedding to cause a divorce down the line- and put the two of you in even greater debt.
Before you make a decision, go through this entire article and note the most important information. By the end, you will be able to make an informed decision about whether you want and need a loan for your wedding or not. And when you are ready, you can start looking for reputable lenders. Fiona, our trusted partner, already did a huge part of research for you and Loanry can connect you with these lenders. If you’re ready to get offers, start here:
Should You Get a Loan?
Okay, now that the facts are out of the way, let’s consider you and your situation. Not everyone in debt gets divorced, and not every divorce is caused by money. I just feel it is important to point out the risks. And now that you know them, you can make a more educated choice.
Before making that choice, however, you need to discuss it with the person you are about to marry. You need to agree to a wedding budget limit so you are on the same page. Starting off in discord about finances is not going to set you up for a positive experience. Decide together if it is worth the payments.
Is It Absolutely Necessary for Your Big Day?
Normally, I say that necessary means keeping your utilities on, but a wedding is a special day. For this occasion, we will expand the definition- a bit. In this case, necessary will mean that the wedding absolutely cannot happen without it. It can also mean that this day is so important to you that you will do anything to have it just the way you want. So ask yourself if it really is necessary. If not, reconsider.
Have You Already Stretched Your Budget?
If you are already eating nothing but Ramen noodles, and your power is in threat of disconnection, you probably do not need to add a loan. If you find that you can squeeze the money out by cutting back on an unnecessary expense, it might not be a bad idea. One thing is for certain: adding debt when you are barely staying afloat is a good way to drown yourself- figuratively, of course.
Are You Expecting an Insurance Settlement, Inheritance, Bonus, or Raise?
Some people know that they have a lump sum payment. In that case, loans for wedding expenses probably will not hurt you. First, though, you need to be sure that it is coming. And you need to consider the amount you should be getting. Try not to borrow more than you will be receiving.
Are You Sure You Can Pay It Back?
We cannot control the unexpected. Accidents happen, layoffs occur, sickness or injury might keep a person from work, and we can suddenly find ourselves flipped on our face with no warning. These things cannot be foreseen. However, if nothing goes wrong, will you have any trouble paying the loan back? What I mean is if you keep the same bills and the same job with the same pay and the same amount of hours, will you be able to pay the loan back? If the answer is “yes”, it is probably okay to look into loans for wedding expenses.
Do You Have a Backup Plan if the Unexpected Occurs?
On the flip side, if you lose your job or your hours or pay gets cut, and so on, do you have a back up plan for repaying the loan? Maybe a side job could help with this. Or maybe you have something you can sell to at least make a couple of payments. If you do not have a backup plan, you do not necessarily have to avoid loans. Instead, just understand what you are risking.
Not repaying a loan or paying late can affect your credit for years to come. Your credit can keep you and your spouse from buying a house or starting a family as soon as you want. Consider this heavily before making a choice. This decision should not be taken lightly.
Is Paying Back a Loan Going to Hurt Other Aspects of Your Life?
If you and your spouse are going to be stuck without running water or having to eat peanut butter and jelly for breakfast, lunch, and dinner until the loan is paid off, it is probably best to back away. Not that there is anything wrong with PB&J, but it can get tiring to eat all of the time.
Are You Ready to Commit?
At your wedding, you will be verbally making a commitment to your other half. That commitment is a big one. Do you really want to add a financial commitment on top of that? The two of you will just be merging your lives fully. That is a big enough step.
As I said, the choice is yours, but understanding your situation can help you make more responsible decisions.
Costs Associated With a Wedding
Weddings can cost about $25 and can go up into the hundreds of thousands of dollars. The amount you spend on your wedding is really about the things you choose to include in your wedding, but there are ways to save on the things you want. Though not extensive, the following are some common wedding expenses:
-Wedding Dress and Bridesmaids’ Dresses
-Flying in Family from Out of Town
-Chairs and Tables
-The Marriage License
The list could literally go on for pages, and if you need help getting that list together, visit The Knot. It is a great website that can help you with your wedding planning.
Reasons to Get Loans for Wedding Expenses
With so many risks, you may wonder why anyone would get one, or what would be good reasons to get one. Wedding loans can literally be used to pay for any of the wedding expenses so people may get them for many reasons. And, again, there really are no good or bad reasons because this is your wedding day. The following are a few reasons some people may choose loans for wedding expenses to help planning:
-Perhaps they want a dress that they cannot afford outright.
-Maybe they want to book their honeymoon, but they need to pay immediately to reserve their room, flight, or cruise ticket.
-They may find that the venue needs to be paid for upon booking. This may also be true for the band or DJ, photographer, florist, or any other professionals.
-They may decide that taking care of everything at once and making payments is better than having to do it little at a time.
-Some couples may just not want to wait. Or, maybe they have been trying to save but not doing well. They decide that they will be more committed to making payments than they are to saving.
What Type of Loan Should You Get?
So you have to decided to get the loan, but what type of loan should you get?
You might have room on your credit card to pay for wedding cost. This is definitely an option but consider your interest rate. Be aware that the interest is compounded monthly. This means that the interest builds up every month until you repay the whole amount. If your interest rate is really low, that may not be a problem for you. However, there are credit cards that go up to around 30% interest. That is huge.
I will break it down: even if you borrow only $100, your interest is going to be $30. If you cannot pay it back next month, that’s another $39 in interest, making the amount you now owe $169. The next month, your interest will come to $50.70 making your total amount to repay $219.70. The crazy part is that $119.70 of that is nothing but interest. It is more than the amount of the original charge. Personally, I avoid things that cost me more than the item I am trying to get.
Another option is short term loans for wedding cost, but these usually have high interest rates and short repayment terms that are similar to a credit card. If you are going to get loans for wedding expenses, look for a personal installment loan. These will often have lower, fixed interest and longer repayment terms.
If you get a personal loan for wedding cost $1,000 and have a fixed 15% interest rate, your entire amount due back will be $1,150. The repayment terms will vary according to the amount you borrow, but most are for at least one year. With this loan and a one year term, you would pay less than $100 a month for the principle and interest. Note that the amount of interest over an entire year in this scenario is barely over three months on the credit card.
How to Avoid Loans for Wedding Expenses
Some people want to avoid a wedding loan at all costs but have no idea where to begin. Lucky for you, we just might have a few ideas to spare:
Cut your wedding expenses as much as possible.
You really do not have to have a chocolate fountain or to ride off in a horse-drawn carriage. I have to admit, that was once a dream of mine, but it is not necessary.
Cut your current expenses and start saving.
By taking a good look at your budget, you can probably find some expense to take out. Let’s say you decide to take your lunch to work twice a week and that it will save you $10. It may not seem like much, but it can add up.
Here is the trick, though: do not just leave the amount you save in your bank or your wallet. By doing that, you will just spend it on something else. Get a jar, bucket, piggy bank, or whatever you prefer to put the money in. Keeping it separate and watching it build up will boost your resolve to continue.
Set your wedding date farther away so you have extra time.
I know this is not usually preferred but sometimes it is necessary to truly avoid loans.
Pick up some extra shifts or hours if your job allows.
Many bosses will love to hear that you want to work more.
Get a side hustle going.
There are a lot of ways to do this, but a great one is by being a server in a restaurant or bar on the weekends. Having worked this type of job for a large portion of my adult life, I will say that it is not something you should do for long. However, to make some side cash on the weekends for a few months, serving can be great.
Yes, there are slow nights and hourly pay is very low, but the tips can be great. There are no guarantees, but in a decent restaurant or bar, you can expect to make anywhere from $200- $700 on a good weekend. There are times it will be more, and times it will be less. Even if you only make $200 a weekend, and you work for 12 weekends, that is $2,400. Not bad for side cash going to your wedding.
Talk to your parents.
Sometimes, parents start saving for events like this when their child is younger but never tell them. Make them aware of your upcoming nuptials before getting too far into the planning. If they have some money saved for this event, they will let you know.
Be creative with your wedding items. Have fun with it.
Weddings do not have to be drab and boring. Colors, cowboy boots, and much more have been mixed in that have decreased costs.
Keep your wedding small.
No matter what Mom says, everyone you know does not have to be there, and you do not have to feed them all. The smaller the wedding, the lower the expenses.
Raise money through crowd funding or fundraisers.
Hello, bake sales and doughnuts.
Tell your family that you would like your wedding presents to be cash.
Ask them to give it to you early so you can use it for your wedding. If you do not feel comfortable asking, see if your mom or cousin will be willing to spread the word for you.
Even if you only make a portion of the costs through these steps, it decreases the amount of money you need. The less you need to borrow, the lower your payments will be.
Your wedding is one of the most important days of your life, but it does not have to be the most costly. If you can cut the costs and pay cash for your wedding, good job. If you cannot, do not despair. Everyone has to borrow from time to time, and loans for wedding expenses are nothing new. The key is to borrow smart, especially by using reputable organizations that help you find a lender. As they are unbiased, they will help you find the right lender for you and your budget.
Brandy Woodfolk is an educator, home business owner, project manager, and lifelong learner. After a less than stellar financial upbringing, Brandy dedicated her schooling and independent studies to financial literacy. She quickly became the go-to among family, friends, and acquaintances for everything finance. Her inner circle loves to joke that she is an expert at “budgeting to the penny”. Brandy dedicates a large portion of her time to teaching parents how to succeed financially without sacrificing time with their little ones. She also teaches classes to homeschooled teenagers about finances and other life skills they need to succeed as adults.
Brandy writes about smart money management and wealth building in simple and relatable ways so all who wish to can understand the world of finance.