What to know if you are considering a wedding personal loan.
Planning a wedding can be really fun but also financially draining. The average cost of a wedding in 2023 is expected to be $29,000, up from $28,000 in 2022, according to Zola. That factors in expenses like flowers, cake, catering, and more.
Having a small, affordable wedding that you can pay for in cash or pay off quickly is a great way to avoid getting into debt at the start of your marriage. However, that might not be realistic.
With inflation, costs are on the rise across the board. If you live in a major city, you might find it difficult to find an affordable wedding venue. If you have a large family or guest list, that will drive up your costs significantly.
It’s very common for couples to borrow money to cover wedding costs. If you are planning to borrow, you should consider all of your options. Here’s what to know about wedding personal loans and financing a wedding.
Wedding Personal Loan vs Credit Card
A wedding personal loan may be a better option than using a high-interest credit card. Credit cards typically have high interest that can fluctuate over time. You could end up paying hundreds to thousands of dollars in interest if you don’t pay off your balance right away.
If you max out your credit card or significantly increase your credit card debt, you will negatively impact your credit score. A major factor in your credit score is credit utilization. That is how much of your available credit you are using.
Depending on your credit score, you could end up scoring a better interest rate with a wedding personal loan. Personal loans come with fixed interest rates, so you will know exactly how much you owe each month. You can pay off your loan early without penalty in most cases. You also might be able to borrow more with a personal loan than your credit card offers. Personal loans can be used for just about any expense. You can apply online and typically get an approval decision within minutes.
Establish priorities with your partner to reduce costs.
Establishing priorities will help you stick to a budget. It’s important that you and your partner agree on where you want to spend your money. For example, if the guest list is the most important factor in your wedding, you’ll want to pick a venue or caterer that charges affordable per person rates. You might not to choose the cheaper menu options to bring costs down. You could have a morning wedding to save money, as breakfast is typically cheaper than serving dinner. If food is an important factor, you may want to skip flowers or other expensive decorations.
Set a wedding budget and stick to it.
Once you have your priorities in order, do some research and set a reasonable budget. This will help limit how much you need to borrow and how much debt you will get into. Wedding personal loans range in amount based on the lender and qualifying factors. You should try to cover your wedding with one loan versus borrowing from multiple sources. Multiple loans can make it difficult for you to manage your debt and pay it off quickly.
You can consolidate debt.
If you feel overwhelmed by your wedding debt, you can use a personal loan to consolidate debts. You can use a personal loan to consolidate loans and credit card debt as well. Debt consolidation can bring down your monthly payment, lower your interest, and make it easier to manage your debt. You’ll want to check rates to ensure you’re saving money by consolidating.
Weddings are expensive and costs are on the rise. If you plan to have a larger wedding, you might be considering borrowing to cover costs. A wedding personal loan might be the best option for you if you can secure a competitive rate and borrow the amount you need. Establish priorities and set a budget to ensure you’re borrowing responsibly. If your wedding debt is becoming hard to manage, consider consolidating your debt into one loan.