Wedding Loans vs. Credit Cards: Borrowing to Get Married

Can you borrow money for a wedding?

In the financial industry, personal loans can be awarded to customers for a number of reasons. One of those reasons can include weddings and covering all the expenses that come with a wedding. These loans are often unsecured, meaning that no collateral such as a home or other asset is used in the event that you forfeit. A personal loan also comes in a variety of amounts, leaving maximum award to the discretion of the lender. Factors that are used to approve these types of loans by lenders are credit score and previous employment history. Often the higher the credit score, the larger the loan.

What is better a way to pay for a wedding: Personal Loan or credit card?

Two of the most common methods used to pay for a wedding is taking out a loan for a wedding or using a credit card to pay the expenses. When you decide what the cost of your wedding is going to be, you have to decide which route is the best for you and your debt. Below are both pros and cons for both credit cards and a personal loan.

Pros for Using a Credit Card for Wedding Expenses

  • Use What You Need
  • No Interest Promotions
  • Online Accessible
  • Balance Transfer Consolidation Opportunity

When you are approved for a credit card, you have access to a certain limit. With a high enough credit score, you will be approved for a limit that covers all of your wedding expenses. You may even receive more than you were expecting and needing for the wedding. No worries, just use what you need. The benefit of the credit card is that you do not have to use the limit you are given, as opposed to a loan that requires you to deposit the full amount and pay that amount back with interest. Having the ability to use just what you need can and will minimize your debt.

Search and review the most popular credit cards available on the market. You want to seek out any promotions, most often the no interest promotion that gives you anywhere from 6-18 months without paying interest on your purchases. Again, this gives you the opportunity to only use what you need and you are not required to pay interest on this money. These cards come approved with good or higher credit scores. Paying off the purchases on the card will also encourage the company to raise your credit limit, giving you more than enough money available for your wedding expenses. This is beneficial, especially since the wedding business can have last minute cancellations or other last-minute expenses that were not originally in the budget.

Home buying after marriage

More benefits to financing your wedding using a Credit Card…

Applying for a credit card is much easier than applying for loans for wedding expenses. A credit card application can be completed in minutes online with quick access to your credit report. Personal loans require you to actually visit the bank in person, speak with the lender, and apply via paper application. This is just not convenient for you when you are trying to plan and budget your wedding. A credit card decision allows you to know where you stand in a matter of minutes. Sometimes the credit company may need a little more information, but like the application, calling in and speaking with them within five minutes will give you the answer you were searching for without hesitation and anxiety waiting to be approved.

Like the no interest offer, there are offers from credit card companies that allow you the ability to transfer debt from other cards to your credit card at no interest. This is known as balance transfer consolidation. If you have used multiple cards to pay for your wedding expenses, you can transfer those balances to a single card with no interest, minimizing your debt to pay back.

Cons for Using a Credit Card for Wedding Expenses

  • High Annual Percentage Rates (APR)
  • Additional fees
  • High Credit Score For Best Offers
  • Separate Interest & Fees on Cash Back

APRs on credit cards are much higher than personal loans. This is even true for the best credit card APRs. Also, when you do not pay your balance off completely each month, these interest charges begin to build and your debt will grow to be much more than your wedding expenses if this is not maintained.

Credit cards also come with additional fees, no matter the company or kind of card. These fees include annual fees, over the limit fees, and late payment fees should you find yourself in the situation. What is also disheartening about these fees is that they are not always the same for each fee and with each company.

More down falls of using a credit card to finance your wedding…

An annual fee can be based upon an agreed upon fee, or a percentage of your credit limit. Should you find yourself spending over the credit limit, expect your purchase to be processed, but also expect an additional fee to be tacked on. These fees are often more than a tank of gas, causing your debt to inflate, and your accrued interest based upon your charges.

For the premium offers of premium rewards, no interest, or no interest on balance transfer, really good credit scores are required. If your credit score runs around the average score and is fair or good, you may receive approval, but your credit limit may not be the number you are looking for in regard to the wedding budget. Getting the limit you need is not guaranteed and a second credit card may need to be taken out to achieve this amount, causing an additional hard inquiry to your credit score.

Some of your wedding expenses may require cash payment, which is tricky when using a credit card for your wedding finance. In order to take out a cash advance on a credit card, a fee is applied instantly for this process. Also, cash back advances have their own APRs separate from the standard card limit. Even if you have a credit card with no interest, you will be charged the cash back APR interest on the cash advance you have taken out. Getting out $100 cash advance for service could actually begin to cost you $125 or more with fees and interest accrual.

Pros for Using a Personal Loan for Wedding Expenses

  • Independence and Less Parental Obligation
  • Use savings for other important events
  • Financial Security
  • Short term payoffs

One of the biggest benefits of a wedding loan vs. credit cards is the independence that comes with taking out your own personal loan. Your parents have less obligation for your wedding expenses, and this gives you and your partner a way to pay for the wedding of your dreams on your own. This independence allows you to be in full control of your wedding decisions also, as some parents find it easy to influence wedding decisions when they are paying the expenses.

Why Would Couple Take Wedding Loan

More Benefits to Financing Your Wedding…

If you are taking out a loan for a wedding, you have the ability to use your savings as a down payment on your home with your partner. Maybe you want to take an exclusive honeymoon. If so, you can use your savings for this trip and not worry about having to sacrifice this event for the wedding.

When you take out loans for wedding expenses, you have the ability to have financial security, as the money needed is up front and available. Wedding loans vs. credit cards in this area take the lead, as a credit card may not have all the funds at once. Financial security for you and your partner is essential to ensure that it goes off without issue, becoming the event that you have always dreamed it would be.

The payoff on a personal loan is fixed and is short term, with maximum payback at five years. When it comes to payback, wedding loans vs. credit cards come out on top, as the credit card payback can be for much longer than five years depending on the amount, accrued interest, and various fees applied to the account.

Cons for Using a Personal Loan for Wedding Expenses

  • Higher Loan APR
  • Enter Marriage With Wedding Debt
  • Major Life Developments May Be Delayed
  • Encourage You To Increase Your Wedding Budget

In terms of loans, personal loans have a higher APR than secured loans that are offered by lenders. Getting a personal loan off hand you know that your interest is not the best that is available.

Also, obtaining a personal loan for wedding finance means that your marriage will begin with a beautiful wedding, but also debt. This is in addition to any other debt you or your spouse may have such as student loans, vehicles, and credit cards.

Wedding Loan

Obtaining a personal loan, you know ahead of time what your monthly payment will be. This loan is something that could delay major life events for you and your spouse due to this financial obligation. The events delayed can include beginning a family in the early part of your marriage, and even delaying purchasing a home. Many couples with wedding debt find themselves beginning these life events a little later after their marriage so that they can be financially stable.

Many personal loans are approved at a higher amount than what was budgeted for initially. If you are approved for a personal loan for more money than you need, then the chances of you increasing your wedding budget will be higher. The temptation of this situation can cause un-budgeted debt later and increase it overall.

Should you Finance Your Wedding?

Many couples consider financing their wedding through loans or credit cards because your wedding is the most special day for you and your partner. Partaking in wedding finance allows you access to the special reception all or ceremony venue you could not have afforded without it. Before you finance your wedding, you should consider your budget and your income. Consider what you have the ability to do in regard to your budget. After you have determined a budget, you must consider how you will finance your wedding. Review the pros and cons of wedding loans vs. credit cards. Consider personal factors such as your income, credit score, and savings so that you know where you can begin the process.

Average Wedding Cost in America Infographic

How To Save Money For Your Wedding and Limit Your Borrowing

If you have reviewed wedding loans vs. credit cards and decided that you do not want to borrow money for your wedding, then there are a few options.

  • Non-traditional season
  • Small venue and guest number
  • Cut the extras

Many wedding costs are inflated due to the wedding season. Have your wedding outside of this time frame to avoid the price gouging of caterers, florists, and other expenses.

Keep your wedding intimate. From the location to the guest list, less is more. The more guests you have required more space, food, and the price continues. Only those that matter the most should be with you and your space on your special day.

Keep the less is more trend going even with the extra expenses. It’s always best to save money on your wedding over taking out various types of loans. Let the extra gifts, events, and expenses that traditional weddings carry, go. Everyone in your wedding party does not need a gift. Also, is the rehearsal dinner really necessary for a small wedding? Paying for an expensive dinner with appetizers and drinks can add up quickly per person. Anything beyond the wedding and reception is expendable and can be considered extra when you are setting a budget. Save Money On Your Wedding

Kasey T writing experiences exceeds over 5 years in Academic and Content Writing, as well as more than 3 years in business writing services. These services include blogs, web pages academically researched articles, and a variety of creating writing assignments. The content subjects range from a business focal point, to public service, personal finance, and variety of topics around money.

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