Planning for a wedding? If so, you’ve probably been searching for venues, sampling food, and going to rehearsal after rehearsal. It can be a fun but also very stressful experience.
Just don’t forget that you have to pay for everything before you can turn your dream day into a reality. After all, the average wedding costs nearly $34,000, according to The Knot, an all-in-one wedding planner. Coming up with all that money at once can prove difficult.
Here’s the good news: even if you can’t cash flow your wedding, you have options. Wedding loans may be your solution to ensuring your wedding goes as planned.
In this guide, we’ll cover all you need to know about wedding loans. And we’ll give you some helpful tips on how to budget and finance your wedding ceremony and reception.
What are wedding loans?
Banks and other lenders don’t have wedding loans in their list of products. A wedding loan is simply a personal loan. Since you can use personal loans for a wide variety of purposes, you can take a personal loan to fund your wedding celebration.
When you look for a personal loan to fund your wedding, do your due diligence. Consider the loan terms, loan amount, and interest rates. Get out a loan calculator and figure out how much it will cost you to borrow for your wedding.
Personal loans have interest rates ranging from 5–36%, according to industry research. That’s a huge range, which is why it’s so important to find the best loan for your budget and needs.
As an example, if you get a $20,000 wedding loan with an interest rate of 8%, and pay it off in exactly 3 years, you’ll pay a total of $22,572 ($2,572 in interest and fees), or about $627 per month.
So before taking a wedding loan, ask yourself:
- Do you need to borrow that much money?
- Can you handle the monthly payment?
- Is the interest rate reasonable?
Wedding loans do offer many benefits. Since they’re personal loans, you can shop for the best rates and terms (you can submit a wedding loan request on Finzmo here!). You also have a lot of freedom with how you actually use the wedding loan. A wedding loan can fund:
- Various wedding expenses, such as the venue, limo service, wedding planner, live band, photographer, caterer, etc.
- The engagement and wedding rings
- Your honeymoon (and cocktails on the beach)
You also have a lot of flexibility with how much you borrow. With a favorable wedding loan, you can enjoy fixed repayment terms that are manageable. That removes a lot of financial stress ahead of your big day.
Requirements for wedding loans
As personal loans, wedding loans are unsecured, which means they don’t require any upfront collateral.
However, wedding loans do have certain credit score requirements. According to The Motley Fool, you must have a credit score of at least 550–580 to qualify for a personal loan. A score in that range should be good enough to find a wedding loan, but the interest rate may not be ideal.
To get the best possible interest rate on a wedding loan (about 5%), you need an excellent credit score. The following chart from Experian details what credit scores are exceptional, great, good, fair, and poor: