Wedding loans: are they worth it?
Unsure if wedding loans are the right choice for you? This article will help break down what they are, how they work, and the pros and cons of taking out a loan to finance your wedding.
Find out if a wedding loan is the best way to finance your big day
Most couples start dreaming about their wedding day the minute they get engaged. But unless you’re lucky enough to have a bottomless bank account, planning your dream wedding can quickly become a financial nightmare.
That’s where wedding loans come in. Is it worth taking out a loan to pay for your big day? Here’s what you need to know.
How do wedding loans work?
In simple terms, it is a type of personal loan that allows you to borrow money specifically for your wedding costs. Consequently, this money can be used for venue and decor, attire, or other necessary items- all at once!
Like any other credit product, you get to qualify for this type of loan based on your creditworthiness. So lenders will review your credit history and income, and the best your rates are, the best your chances to qualify for higher loans.
One of its main benefits is fast access to the total amount you need! Also, the interest rates are lower, allowing you to make long-term repayment, which may vary between two and seven years.
What is the difference between wedding loans and personal loans?
Well, there is not much difference between wedding loans and personal loans. It is basically the same since the borrowed money can be used for any reason, and you must repay it in time.
Usually, the term “wedding loan” is used for marketing reasons. It typically stimulates the soon-to-be newlyweds to think about financing their wedding.
So it would help if you planned yourself since it requires monthly payments and is an extra expense. Also, you might damage your credit history if you don’t organize your budget. And that’s the last thing you need!
How much money can you borrow from a wedding loan?
It will depend on how much you need and on how much the lenders will let you borrow! Usually, you can ask for any amount that will cover your wedding costs.
However, some factors will be decisive, such as your credit history, your income, or any debt you may have. Also, if you have a co-borrower and the lender’s terms will be determinant of the lender’s decision.
So, depending on these factors, you might get to borrow $1,000 or $100,000. It will depend on your wedding expenses and your creditworthiness.
What do wedding loans cover?
As previously said, with this type of loan, you can use the funds available to cover all costs related to a wedding.
The list might vary from wedding to wedding, but it usually covers the venue, photographer, catering, entertainment, dresses, and suits. Also, engagement and wedding rings, and even your honeymoon!
What should you consider before taking a wedding loan?
Just like any other product, before applying for this type of loan, you must shop around and see what will be the best option for you. Otherwise, you might end up having trouble with the payback period.
So first, it is a good idea for you to check your credit score. You need to know what your rates are and what lenders might see. If your credit score isn’t that good, take your time and work on improvements. The better your credit history, the more chances you get to qualify for higher loans.
Next, you should prequalify for multiple lenders to compare the offers without hurting your credit.
Remember to compare lenders’ terms, such as interest rates, fees, and repayments. So you can choose which one will fit your financial situation the best.
In addition, you must prepare yourself for this extra monthly expense and make a repayment plan. And if you have doubts, don’t be afraid to do some research or look for professional advice.
How to apply for wedding loans?
The application process is not as complicated as you might think. There are many online lenders that you can prequalify for and compare de options.
Once you’ve decided which one fits you best, you’ll need to provide personal and financial information, such as an address, ID, employment status, and income. Once you’ve gathered all the documents requested, send your application.
If you’re approved, you can almost immediately have access to the requested loan amount and start planning your wedding as you wish!
And, finally, you’re getting married. Congratulation! With a wedding loan, you can start planning the big day without worrying about not having enough funds for it!
If you want to learn more ways to finance your wedding, we have great tips! Read the next post and find out what personal loans are and how to get one!
About the author / Beatriz Vieira
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