Should I Get A Loan To Pay For My Wedding?
It is no surprise that planning a wedding is expensive. All you have to do is go to one wedding to understand how it can get quickly out of control. When it comes to planning your own wedding, it is easy to get swept up in the emotion of the day. When you get swept up in the emotion, it is easy to blow your budget out of the water. Before you know it, you have a 400 person guest list full of names you do not recognize.
There are many tips available online to help you shave off the cost of items. Perhaps you do not want to worry about making your own centerpieces or buying a second-hand dress. Maybe you just want to rent chair covers and doves despite how much it is going to cost. If you know what you want, but you are not sure how to pay for it, then you may think “I need a loan to pay for my wedding”.
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 the research for you, and Loanry can connect you with these lenders. If you’re ready to get offers, start here:
Continue reading to find out all the good and bad that comes along with obtaining a loan before you actually get one to pay for your wedding. You want to make sure that any decisions you make for your wedding are sound and rational ones.
What Is A Personal Loan?
Before you start thinking “I need a loan to pay for my wedding”, you should make sure you truly understand personal loans. You should understand everything you can about financing a wedding before you make a decision about how you plan to pay for your wedding. When you have all of the information, you are able to make the best decision for you. Most loans are considered personal loans, even if they are not specifically called personal loans. A personal loan is when a lender allows you to borrow money. In return, you make a promise to repay the money to the lender by making regular payments, typically monthly, over a specific period of time. This time period can be anywhere between three to five years.
The lender of a personal loan can be a bank, credit union, an online lender, or even a family member. The lender adds a fee, called interest, to the loan to allow you to borrow the money. The amount of interest varies based on many factors. Once of those factors is your credit score. The amount you have to repay each month remains the same and does not change each month. The loan is a contract between you and the bank and you have to sign the loan document. You must read the entire document, including the fine print. Another point to consider is that if you do not make your monthly payments, it will negatively impact your credit score.
Is A Wedding Loan Right For Me?
When you are considering a loan to pay for my wedding, you first have to ask yourself if you should get a loan. Remember, a loan is simply borrowing money. That means you have to pay it back. You have to begin paying it back immediately within 30 days. You are the only one that can determine if a loan is the best idea for you. No one else knows your situation to be able to answer that for you.
You must take a hard look at your budget and determine if you have the money to make the monthly payments. If you do and it is not a hardship for you, then a loan might be right for you. If you do not have the money, or it looks like it might be tight for you to make that monthly payment, you should think long and hard about not getting the loan. Look at your budget and see if there are any places where you can cut spending in your day to day life. This may help you save more money, or have the additional money to make the monthly loan payment. There are usually many ways to cut spending from your daily budget. You just have to be willing to make those sacrifices.
Are there other ways you can get the money you need? Are you able to borrow it from a family member? Is there any way you can reduce the cost of your wedding? Perhaps you can change the date to give yourselves a little longer to save the money.
Advantages Of A Personal Loan
There are some advantages to obtaining a loan to pay for my wedding. You can often get a better interest rate from a personal loan than you get when you use your credit card. If you have good credit, your interest rate could be a really low rate. You may have many loan options available, if you have good credit. If you have a loan, you have the money to pay for whatever bills that come up as a result of the wedding. You do not have to worry about if you have the money you need for each bill.
Planning a wedding is incredibly stressful and if you have the money in the bank from a loan, that is one less stress that you have. Also, you can pay the bill upfront and pay for the loan each month, instead of having to pay the money all at once. Even if you have the money in the bank, it might be a better idea to take out a loan. The money you have saved can stay in an interest-bearing account. Then you can pay the loan from that savings account while the interest continues to grow. Having a loan allows you to start your life together without the stress of not having the money to pay the bills.
Disadvantages Of A Personal Loan
While there are many advantages to getting a loan to pay for my wedding, there are also some disadvantages to a personal loan. You should be aware of all the information to be able to make a good decision. The biggest negative to taking a personal loan to pay for your wedding is you are taking on more debt. You are starting your life together with debt. This may not be the only debt you have. If you have a mortgage and a car payment, this debt is added on top of that.
Having a loan may prompt you to spend more money than you really wanted to. If you did not have all the money in the bank, you may have gone with items that cost a little less, or you may have opted not to have something at all. It is really easy to allow your spending to get out of control when you have money waiting to be spent. However, you should keep in mind that money is not free and clear. You have to repay it. The more of it you spend means the less of it you have to use to repay.
This leads me to the biggest concern you should have, which is can you afford the loan? Are you able to make those monthly payments? If you already know that you cannot pay back the money, you should not take out a loan. When you are not able to repay the money, it is a hit to your credit. That has long term implications for everything else you want to do. If you do not repay the loan, the lender will come after you for the money. You will get collections calls and that is a stressful situation. You do not want to start your life together sinking in debt that you cannot afford to repay.
What Should I Know About A Wedding Loan?
When considering a loan to pay for a wedding, there are a few points that you must keep in mind before obtaining a loan. You should make sure that you read all the fine print because lenders are legally required to give you all the information about your loan, including fees and penalties. You want to know if any loan you are considering has a penalty if you pay off the loan early. Some lenders charge you for early pay off because they lose all the money they would have made from the interest if you pay off the loan early. You want to know what happens if you make a late payment or skip a payment. Sometimes life gets in the way and you might miss a payment. You should know how the lender will react to you making a late payment.
Does My Credit Make A Difference?
When it comes to just about everything, including a loan to pay for my wedding, credit matters. When your credit is in good shape, it is a benefit to you that your credit can get you low interest loans and quick approvals. However, when your credit is in bad shape, it haunts you at just about every turn. It impacts your ability to get a new car, rent an apartment, get insurance and sometimes impacts your ability to get a job. In this specific case, it can hurt your chances of getting a loan for a wedding. It can also cause you to have a high interest rate on your loan.
Your credit score indicates your credit worthiness to lenders. It is what they use to provide them an idea of whether or not you will pay back your loan. They tend to believe that the higher your credit score is that means the more likely you are to repay your loan. The lower your credit score is means the higher your interest will be for your loan.
A credit score range is anywhere from 350 to 850. The average credit score falls between 600 and 750. When you have credit between the range of 670 to 800, it is considered good credit. Bad credit usually falls in the range below 570. When you fall below 570, you are in a zone where it is hard for you to get a reasonable interest rate. Lenders believe those with bad credit may not be the best candidates for loans, even if it is a wedding.
Where Can I Find A Loan To Pay For My Wedding?
When you think that you “want to obtain a loan to pay for my wedding”, you should know what type of loans that are available to you. You cannot make a smart decision about a loan without understanding if you can even afford to repay a loan. Before you begin looking at loan options, you should have some understanding about how much you can afford to repay each month. You should also have some idea of how much your wedding is going to cost. You cannot know how much you need to borrow if you do not know how much your wedding is going to cost.
Once you have a clear idea of the cost of your wedding, you can begin to shop around for loan options. Loanry can help you find a lender for your situation. Depending on your credit score and other factors lenders take into account, you may find a sutiable lender which may agree to lend you money under their conditions. If you agree to their terms, then you solved the problem of wedding financing. Loanry does not lend you money, we just help you potentially find the best solution for your needs.
Is Using A Credit Card A Better Idea?
Before you consider a loan to pay for my wedding, maybe you should think about using a credit card. There are, of course, many advantages and disadvantages to doing using a credit card.
All credit cards come with a credit limit, so you have a cap on how much you can spend. If you already have some credit problems, you may not be able to qualify for a credit card with a high enough balance to pay for what you need. If you use a credit card, you end up using all the available balance which means if you need it for some type of emergency, it will not be available to you.
When you use all or most of your balance on your credit card, it can impact your credit score and make it drop. Many credit cards have a higher interest rate than loans. Your repayment amount is variable as it changes by how much you spend each month. This means you may never know how much you owe. You also may not be able to pay more than the minimum payment which does not really help you pay down your credit card.
There are some benefits to using a credit card. You may be able to find one that gives you a promotional rate of zero percent interest for a certain period of time. That means as long as you pay it off timely, you do not have to pay any interest on the card. This is better than any loan. You only have to use the money you need when you need it. That is all you have to repay. With a loan, you take the entire amount and begin repaying it immediately. If you only spend a small amount and are good about paying all or most of it each month, a zero interest credit card could be a better option for you.
Is It Better To Save Money?
Saving money is always a good idea. In general, even when you are not considering a loan to pay for my wedding, you should make sure that you are saving money. It is good as a general rule for good financial health. When you are thinking about starting your life with someone, you should start it on a good financial base. This includes having a sound budget and savings plan.
When you are considering a loan to pay for my wedding, you should know how much your wedding is going to cost so that you have a good idea of how much money you need to save. If you have a budget already in place, you know how much more money you can afford to save each month towards your wedding. Any amount of money you save is less money that you have to borrow or put on your credit card. If you have a 12 to 18 months to plan your wedding, that could give you a reasonable amount of time to save money.
I gave you a lot of information about choosing a loan to pay for my wedding. You need to think carefully about the right decision for you. Planning a wedding can be a stressful and emotional time. You should make decisions because that is what you and your partner want, not because it is what someone else tells you to do. Stay focused on your wedding and your wants before you decide to take on a loan to pay for your wedding.
Julia Peoples is a long-time business manager focused on providing decision making assistance to the public. She works with people at key points of their lives who are making important retirement and financial decisions. She has had many articles published that educate the public on sound financial decision making.
Julia writes for those who are working towards financial freedom or a better understanding of how finances work. She has shared her financial insights with individuals on a one on one basis for years.