A wedding is, of course, an exciting and fantastic event in a couple's life. Some people know what they want from the beginning, but some can't decide until the end. For example, someone wants a large-scale holiday, and someone wants a modest ceremony by the sea.
However, no matter what wedding format people prefer, it often comes down to money because weddings are expensive. Especially if you still want a celebration, and not just sign papers at the city hall.
Perhaps some people have specially set aside money for this day or the opportunity to borrow it from relatives. But what if you don't have any savings, you can't borrow, but you still want a holiday? You can take out a wedding loan.
What is a wedding loan?
In fact, there is no special loan for a wedding. When you go to the bank, you are offered a personal loan at this request. You can take out such a loan from a bank, a credit union, or a private lender - it all depends on your preferences and, sometimes, your credit score. Since personal loans are often unsecured, your credit history will play a role. And the higher your credit score, the more favorable terms (such as a low-interest rate) you can get. You can safely go to the bank with an excellent credit history, and with a bad one, it is better to pay attention to private lenders. But first things first.
A wedding loan is essentially a personal loan. Depending on the need and your credit history, you can borrow from $1,000 to $50,000. The loan term often depends on your choice. The shorter the term, the higher the monthly payment. The longer the term, the more interest you pay. Interest rates also vary depending on the financial institution that provides the loan, your credit score, and of course, the average interest rate in the country.
When you choose a loan, you should pay attention to the annual percentage rate. It represents the total cost of borrowing and includes interest and any fees. Before you apply for a loan, it is better to compare the rates of several lenders and choose the lowest one.
Pros of Wedding Loans
- A wedding loan is a convenient way to get money. Once you start planning your wedding, you will find countless services that require at least a down payment, if not a complete amount. The dress and accessories also cost a lot of money. And if you don't have a large savings account, a wedding loan can help cover those expenses.
- Such a loan is quite easy to get, especially with a good credit history. You can apply for a loan online in a couple of minutes. And, if everything is in order with your financial documents, you will receive the money within a couple of days, sometimes even earlier, in your account.
- A personal (aka wedding) loan is usually cheaper than a credit card due to the lower interest rate. A high credit score will make it much more affordable than other loans, and you won't have to spend too much money on interest payments.
- Often, personal loans do not require initial payments and do not provide for early repayment fees. So if you plan to pay back at least part of the loan from the money donated for the wedding, this can be beneficial.
- You can also improve your credit score by making your monthly payment on time and not missing it.
Cons of Wedding Loans
