Taking out a Loan for a Wedding: Diamonds to Debt

While weddings can be done at reasonable costs, many are extremely expensive. Since the day of marriage is one of the – if not THE – biggest days of your life, it’s no wonder that you want it to have all of the trappings. A great dress or suit, the perfect venue, top-tier decorations and catering…it all adds up to a significant sum. If long-distance travel is involved, costs go even higher. Because of this, it’s no wonder if you’ve considered taking out a loan for a wedding or for travel finance.

Before taking out any loan, you should always consider whether it’s a good idea in the long term. Many say that you actually should not get loans for wedding expenses. The Balance explains that the biggest issue of contention in a relationship is money, and that starting out your new life with a pile of debt can bring unnecessary friction. They suggest having a smaller wedding celebration and using the money that would have gone to loan payments for other options. The loan payment money could go to things like saving up for your first house, retirement, or investments.

What is a Wedding Loan?

In almost all cases, a wedding loan is just a personal loan that you’ve decided to use to pay for wedding expenses. It is unsecured, so you can’t lose your house if you don’t pay it back. Legally speaking, the term “wedding loan” is just a colloquialism.

As with other personal loans, your credit score is the main determining factor for approval. Your employment history will typically factor in, as well. If you’re unemployed, lenders are unlikely to be interested in financing your plans.

Should You Take Out a Personal Loan for Your Wedding?

Though some advisers are against the idea, others say that there are pros and cons to the idea of wedding finance. The goal is always to find ways to save money on your wedding rather then borrow it for the big day. Pros of taking out a loan for a wedding include:

  • It’s easy to get a loan if you have a good credit score and stable income
  • Interest rates are typically lower than that of credit cards
  • It usually just takes a bit of paperwork to get the loan
  • You’ll be able to pay for a bigger or more extravagant wedding

There are, however, some cons to keep in mind:

  • It can be hard to start a marriage with more debt
  • If you already have a lot of debt, the new payments can seriously pinch your finances
  • Interest makes it so you have to pay back much more than you borrowed
  • Those with bad credit will have to pay much more interest

Other Options to Consider

Farm Bureau Financial Services says that there are several other options to consider. These include saving up over a longer engagement, creating a wedding budget to stop feature creep, downsizing your guest list, and shopping around. It's always a good idea to shop around anyway, but if you're trying to avoid taking out a loan for a wedding, you may need to do more of it.

Are Wedding Loans Worth It?

Only you know if taking out a loan for a wedding will be worth it. That’s because you know your finances, employment status, and your own tolerance to debt. For a wedding, be sure to talk to your partner as well. Even if you’re fine with the debt, there’ll be problems if he or she is against it.

With that in mind, the answer is, as they say, a definite maybe. If you’ve spent your life dreaming of a big, flashy wedding, you’ll be disappointed with a small one. You surely intend on your wedding to be a one-time event, so it can be worth it to make it extravagant.

On the other hand, if you loathe having to pay bills, it makes sense to avoid adding one to the pile. The same is true if you know that you’re likely to have periods of unemployment or underemployment. Then, it’ll be worth it to save up so you can avoid the stress.

Wedding decoration

Can You get a Personal Loan for an Engagement Ring?

Engagement rings are typically more affordable than wedding rings, but they can still be expensive. Because of this, the idea of taking out a loan for one may come to mind.

The short answer to this is “yes.” You can take out a personal loan for pretty much any legal purchase. As with a wedding loan, the approval will depend on your credit history and employment status.

In 2021, the average cost of an engagement ring was between $4,700 – $5,600

Whether you should borrow money for an engagement ring depends on the same factors as taking out a loan for a wedding. It’s always a good idea to consider alternatives to loans. Note that you should also look for ways to keep the cost of your engagement ring down, such as shopping online.

Most popular diamond shapes

Banks that Offer Wedding Loans

Since a wedding loan is a personal loan, you can get one at almost any full-service bank. Banks often do not advertise them as “wedding loans,” but if their underlying product is a personal loan with no real limitation on use, you can get one for your wedding.

According to Student Loan Hero, there are several online banks that can provide the needed funding. These include Prosper, Earnest, and LightStream. Loanry is another excellent source for all types of funding needs that include helping you find a lender.

Conclusion

Taking out a loan for a wedding is quite common, to the point that some financial institutions specifically list this purpose in their “reason for loan” drop-downs. As we have discussed, there are benefits and drawbacks to this solution. They can allow you to have a bigger or more extravagant wedding without the need to save up. On the other hand, they are debt, and debt of any sort involves interest and repayment.

Whether taking out a loan for a wedding is right for you depends on whether you are more attracted to the idea of the fancy wedding or to being debt-free. Think wisely before making your choice, and you should be satisfied with the results either way.

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Everything You Need to Know to Save Money on Your Wedding

You can have the wedding of your dreams without breaking the budget. But you’re going to have to plan ahead to do so. The strategies below can help you save money on your wedding without sacrificing everything you’ve dreamed of. You can shop around, compare costs, and downsize these things to stretch your budget further, though.

How Much Money Do You Need to Save for a Wedding?

The Knot Real Wedding Study for 2021 revealed telling information about the costs of weddings with the average wedding ringing in at nearly $22,500 (without the honeymoon) and the average “per guest” spend coming in at $307. The good news is that your wedding doesn’t need to be nearly as extravagant as these weddings for you to have an amazing experience your friends and family (not to mention the two of you) will cherish for many years to come.

The key is to decide on a budget and create the best possible wedding within those budgetary constraints. The last thing you want to do is create the wedding of your dreams that becomes a financial albatross as you are beginning your new lives as husband and wife.

How to Save for a Wedding in a Year?

It’s quite possible to save for a wedding in one year’s time – as long as you’ve created a budget that works with your goals and expectations. Obviously, if your dream wedding costs more than your annual income, you’re going to have to make some adjustments.

The Knot recommends using simple math to plan your wedding budget. If your goal is to spend $20,000 for your wedding and you plan to get married in one year, then you need to save $1,700 per month to make it work.

If you can’t manage to save that much, look for big ticket items you can eliminate from the budget or extend the amount of time you plan to save for your wedding.

What kinds of things can you eliminate from your budget? Consider the following:

  • Switch wedding venues
  • Create a smaller guest list
  • Reduce the size of your bridal party
  • Slim down the menu

Any of these things can help you save more effectively for your wedding by reducing the overall costs of it.

Wedding Budget

How do I Save Money on My Wedding Cake?

While you are working out ways to cut costs on your wedding, the last thing you want to do is go broke on your wedding cake. Consider these recommendations from Wedding Wire to keep the costs of your wedding cake under control:

  • Ditch elaborate cake designs. The bride should be the prettiest thing in the building after all. Plus, something simple is sometimes supremely elegant
  • Go with slimmer slices. This helps stretch your cake and your budget further without stretching as many waistlines in the process
  • Choose a small, tiered display cake and a larger sheet cake to serve your guests. The best part is they’ll never know the difference

Little tricks like these can help you save big on your big day. This will either leave more money in your budget for a honeymoon or help you develop life-long habits for saving money and stretching dollars.

$4,500

The Average Honeymoon Costs

How do I Save Money on My Wedding Dress?

There are plenty of things you can do to save huge amounts of money when buying a wedding dress. These are just a few options available to you from low costs (as low as the costs of slight alterations) to moderate costs:

  • Borrow from a family member of similar size. It might not be your first choice, though in some families it’s a tradition. With the average costs of a wedding dress above the $1,500 mark, it’s a good tradition to start
  • Shop vintage and second hand. There are some wedding shops that specialize in second-hand wedding gowns. Not only is it budget-friendly, it is also planet-friendly
  • Buy last year’s designs. This is one of the more expensive options for cutting costs, but it is highly effective and can save you hundreds of dollars, if not more

There is always the option of borrowing money for your dress or asking for your mother to help pay for it as a wedding gift to you since wedding finance is no laughing matter.

Wedding setup.

How Can I Save Money on My Wedding Venue?

There are many ways you can save on your wedding venue. One thing to consider is whether you need a specific venue hot spot or if you have a friend or relative that will allow you to celebrate your big day on their property. This eliminates the venue fees freeing up precious funds for other things.

However, you can save big on your venue by thinking outside the box. For instance, The Knot Real Wedding Study reports that fall and summer are the most common times of year for weddings, accounting for 37 percent each, of all weddings Saturday is the most popular day of the week for weddings. This means you can save money on your favorite venues by getting married in winter or spring and planning your wedding for a day other than Saturday.

Wedding Photographer Cost

An average wedding photography prices vary from $2,500 to $5,000.

How to Pay for a Wedding with No Money?

For starters, keep your wedding small. It’s hard to plan a big event when you have little to no extra money in the budget. This might be a case where you opt for a small civil or religious ceremony, and then consider a less formal party or event to celebrate with your friends and family. Offbeat Bride suggests you can have a low budget wedding with as little as $100. It might not be the day of your dream, but the important thing is that you’re marrying the spouse of your dreams.

Another thing you can do to is to ask for help. Explain to friends and family members that you’re trying to save for your wedding. Ask that they consider donating to your wedding fund in lieu of Christmas, birthday, and other annual gifts.

Thinking about taking out a loan for a wedding? You’re not alone. Many couples consider getting wedding finance help in the form of personal loans and other finance options. Some opt to pay for weddings out of pocket and seek travel finance help to fund dream honeymoons once the main event is over.

Conclusion

Financing a wedding is hard work. Our goal is to help you understand your loan options ahead of your big day. Contact us to learn more about the services we provide and the many ways we can help you manage credit, taxes, and more to get your financial affairs in order as you begin your new lives together.

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Various Types of Personal Loans to Get Money Fast

A personal loan is a flexible type of loan available from a variety of lenders. These loans may be for a specific purpose or have an open-ended use. Though most are unsecured personal loans, some do have assets backing up the value. For those individuals who wish to borrow funds for any type of need, this type of lending opportunity is one option.

There are limits to them – many are hard to obtain without good credit. Others require assets to back up their value. If you are thinking about borrowing to pay for a wedding, fund a vacation, make some home improvements, or tackle other goals, choosing the best types of personal loans for your needs is important.

The Types of Personal Loans Explained

What are the types of personal loans available? Generally, a personal loan allows you to borrow funds to accomplish any task you need. Unlike a mortgage, which has the specific goal of purchasing a home, these funding options are more flexible. There are plenty of reasons to consider them, depending on your needs.

Before you make a decision, take a closer look at the options available to you. First, consider the difference between secured and unsecured personal loans.

What Is a Secured Personal Loan?

A secured personal loan is one backed by a valuable asset. If a person takes out a secured personal loan and fails to make payments on it, the lender can take possession of the asset to repay the debt owed.

Pros

Secured personal loans offer several benefits. Because there is an asset working as collateral, the loan is easier to obtain. Those who may have less-than-ideal credit may still qualify for the loan. In addition, it is less of a risk to the lender. For that reason, interest rates may be lower than an unsecured personal loan.

Cons

Secured loans are only available if you have a valuable asset available to pay for them. If you don’t have an asset that can appraise at a high enough value, you may be unable to secure this type of loan. Most lenders will only approve you for the value of the asset. Some may offer more than this, depending on your credit score.

 

What Are Unsecured Personal Loans?

Unsecured personal loans are just the opposite of a secured loan. These funds can be used without the use of collateral. The amounts range from $1,000 up to $25,000 or sometimes more.

Pros

Without any security needed, unsecured personal loans can be very accessible. You may have the freedom to use the funds for any need.

Cons

The downside of unsecured personal loans is that they are hard to obtain. Individuals must have a steady stream of income and a good credit score to obtain them. That’s because these loans have more risk to the lender. If the borrower stops making payment, the lender does not have any asset backing the value. Personal loans like this also tend to have higher interest rates, which means it costs more to borrow these funds.

What Is a Personal Line of Credit?

A personal line of credit, or personal installment loans, is another type of funding option available to many. Unsecured versions are available for many people based on credit scores. They work much like a credit card but tend to have a higher borrowing limit. Like credit cards, you may be able to use the funds, repay the funds, and borrow again. Most are unsecured loans, though some secured versions may be available.

What should you know about personal lines of credit:

  • They can be hard to obtain.
  • You need good credit to get most of them.
  • The funds are versatile. You can borrow and pay back the funds over time numerous times.

Guide To Personal Loans

What Are Debt Consolidation Loans?

Debt consolidation loans provide an opportunity for individuals to repay their debt in a new loan. These loans allow you to use a new line of credit to pay off your existing debts, such as credit cards, medical debt, and other personal loans. In some cases, they have a lower interest rate than credit cards. And, they allow you to consolidate multiple payments into one monthly payment.

There are a few things to know about debt consolidation loans:

  • They can be secured, such as based on the equity in your home, or unsecured if you have good credit.
  • Your lender may require you to use them to pay off your existing debt, therefore ensuring you don’t double the debt you have.
  • Interest rates, terms, and borrowed amounts vary significantly from one lender to the next.

Wedding Finance Loans Explained

A wedding finance loan is an opportunity to borrow funds to use to pay for your wedding needs. Many couples use loans for wedding expenses and can pay for expenses ranging from the wedding dress to the vacation. The amount borrowed ranges significantly based on a borrower’s credit score. Wedding finance loans are a form of a personal loan since most do not require collateral to obtain them. Yet, borrowers will need good credit to qualify for them.

With wedding finance loans, consider:

  • The interest rate on these loans can be high, depending on the borrower’s credit score.
  • The amount available to borrow depends on the term length as well as the income and credit qualifications of the borrower.
  • Some lenders will provide wedding financing. Some rental halls or third-party lenders may also offer them. Compare terms wisely before making a decision.

Vacation Loans and Travel Loans

Vacation loans, sometimes called travel loans, allow an individual to borrow money to travel. They are a simple personal loan. Both secured and unsecured personal loans are available for this type of use, but they can have high-interest rates. Secured versions, such as those backed by home equity, are more affordable. Borrowers must be well qualified to obtain them – usually with a steady income with proof of the ability to repay the loan.

Here are a few things you need to know about travel finance loans:

  • They can be hard to obtain unless you have good credit overall and steady income.
  • These personal loans may be less expensive than using credit cards overseas, making them worth exploring for many borrowers.
  • The amount borrowed can e used for just about any need, though some lenders will not lend significantly for unproven borrowers for this need.

Medical Finance Loans

Individuals in need of help to repay medical bills may be able to take out a personal loan for them. Those who have good credit and steady income are more likely to be qualified for these loans. However, medical debt does not carry an interest rate in most cases, making medical finance loans a bit more expensive than paying the bill outright. For those who cannot do so, it may be wise to consider personal loans as a loan for medical bills.

  • Verify and compare interest rates among lenders. As unsecured loans, these can be expensive in some cases.
  • The amount you can borrow will range widely based on your credit qualifications, but most lenders will not lend out large sums of money to unproven borrowers.
  • For those behind on debts, consider a debt consolidation loan for medical debt. This may help reduce some financial burden.

 

Home Improvement Loans

Making repairs to a home can be an excellent way to add value to it. Home improvement loans may help borrowers do this. If you have equity in your home, which is the value of the home that is above the amount owed on a mortgage, a home equity loan tends to be a more affordable option compared to a personal loan. This is a secured loan. However, it is possible for some borrowers to secure a home improvement loan without equity.

  • Secured loans tend to have a significantly lower interest rate than unsecured home improvement loans.
  • These loans can help a borrower to make repairs and upgrades to their home before listing it for sale, allowing them to pay off the loan in full at the time of the sale.
  • Home improvement loans may require some backing by the lender if they are larger values.

Co-Signer Personal Loans

Individuals who have fair or lower credit may find very difficult to get a personal loan online. However, a co-signer loan may be able to open some of that up for you. Here, a second borrower is added to the application. This individual may be held responsible for the debt, as is the initial borrower. His or her credit, income, and references can help back up these loans to the lender. With more credit behind the borrower, this may make it easier for individuals with poor credit to obtain the loan.

There are a few considerations for co-signer personal loans:

  • The co-signer should preferably have a better credit score and history to help support the borrower’s efforts.
  • Bot secured and unsecured loans are available in this manner.
  • Interest rates, terms, and overall borrowing amounts vary based on need but also on qualifications of both individuals.

Personal Loan Shopping

Personal Loan Interest Rates Explained

When choosing personal installment loans, consider the interest rates of them as well. Some borrowers offer both fixed rate personal loans and variable rate personal loans. In all cases, you should loan shop to compare your options.

Fixed Rate Personal Loans

A fixed rate personal loan has an interest rate that remains the same throughout the lifetime of the loan. The monthly payment also remains the same. This helps borrowers to make consistent payments throughout the lifetime of the loan.

Variable Rate Personal Loans

Variable rate personal loans are a bit more of a risk because the interest rate can vary from year to year. This can make payments increase over the lifetime of the loan. Some variable rate loans offer a lower interest rate to start with, but it can rise to significantly higher rates down the road.

Final Thoughts

Which personal loan type is right for you? Take into consideration all of these options and then determine which one can help you to meet your financial goals. Most lenders do not use specific names for these loans. Rather, they want to know if you need a secured or unsecured personal loan, the value of it, as well as the use of it. Then, the lender can help you navigate each one of your options to determine the best fit. You can get a personal loan online through numerous lenders.

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