Weddings are often expensive, and you may not have enough money saved to cover the costs. If you can afford to make monthly payments, a wedding loan can be a useful option for planning your perfect day. Wedding loans or unsecured personal loans can be used to cover all of your wedding expenses. In this post, we go over our list of the best wedding loans, how to get one, and how to use your loan calculator to calculate your pay back.
While banks, credit unions, and online lenders all provide personal loans for weddings, online lenders usually have the best options. The online application process is simple and painless, and you could have funds in your account within a few business days.
What is a Wedding Loan?
A wedding loan is an unsecured personal loan, which means it does not require collateral—something of value, such as a savings account, that the lender can seize if repayment terms are not met. Personal loans are a convenient way to cover typical wedding costs such as the venue, photographer, and catering because they can be used for almost anything.
Wedding loans typically range from $1,000 to $100,000. You must make monthly payments with payoff terms ranging from one to seven years. Interest rates depend a lot on your credit score, and people with good to excellent credit get the best rates.
When is a Wedding Loan Necessary?
According to The Knot, the average cost of a wedding in 2020 was $19,000, a decrease from the $28,000 average price in 2019. (The average price in 2020 was skewed due to fewer weddings as a result of COVID.) If you don’t have a large sum of money saved up and don’t have enough time to save, it may be a good idea to consider a wedding loan.
A wedding loan is usually only a good idea because of the financial commitment if you:
- Be eligible for a low-interest rate;
- Be certain that you will be able to make on-time monthly payments; or
- Expect to receive cash as wedding gifts, which you can use to help pay off your loan.
If you take out a wedding loan, or any type of loan for that matter, make sure you can afford to repay it within the agreed-upon terms. It’s not a wise financial decision if you can’t meet the repayment obligations. Failure to repay your loan can have serious consequences for your credit score and may result in additional penalties.
How to Get a Wedding Loan
While the procedure varies depending on the lender, the following are the general steps to apply for a wedding loan:
#1. Examine your credit score.
Start by getting a free copy of your credit score from your credit card company or another website that gives them out. This will give you an idea of your creditworthiness and qualification prospects. Aim for a minimum score of 610; however, a minimum score of 720 will yield the best terms.
#2. Take steps to improve your credit score if necessary.
If your credit score is less than 610 or you want to improve your score to get the best terms, take the time to improve your score before applying, such as by lowering your credit usage or paying off unpaid debts.
#3. Determine the amount of money you need to borrow.
After you’ve checked your credit score, figure out how much money you’ll need to borrow for your wedding. But keep in mind that you’ll get your money in one lump sum and will have to pay interest on the entire amount, so only borrow what you need.
#4. Shop around for the best interest rates and terms.
Many lenders will let you prequalify for a loan before you fill out an application. This lets you see what terms you would get with a soft credit inquiry. Prequalifying allows you to shop for the best rates without jeopardizing your credit score.
#5. Submit a formal loan application and wait for a decision.
Once you’ve found a lender who offers you the best terms for your situation, you can apply online or in person. This process can take anywhere from a few hours to a few days, depending on the lender.
Wedding Loan You Don’t Pay Back
If you’d rather not take out a personal loan that you don’t have to pay back to finance your wedding, you’re in luck. There are many other ways to pay for a wedding, and you might also want to look into ways to lower the cost of your big day. Here is how to get a wedding loan without pay back:
#1. Pay a credit card payment.
Paying for your wedding with a credit card isn’t a good idea for most people. It only works if you have a good credit score and can pay off your credit card debt quickly. Most financial experts would tell you not to open a new credit line to pay for your wedding.
#2. Fund your wedding through crowdfunding
Start by asking your parents and grandparents what they can do to help. It’s also worth thinking about asking for cash instead of engagement gifts and creating a wedding registry. Instead of buying gifts, your closest friends and family will most likely be happy to contribute financially to your special day.
Alternatively, rather than asking your family to pay for the wedding costs and potentially feeling obligated to follow their every suggestion, if they ask what they can get you as a gift, ask for cash! Cash is always useful because it can be spent however you see fit!
#3. Save and wait
This is the best option for many couples. Use the extra time to your advantage by working hard and saving as much money as you can. Even if you do end up taking out a loan, it will be a smaller one that you can pay off sooner.
#4. Scale down your wedding
A smaller wedding isn’t always a bad thing. After COVID-19, micro-weddings became popular. Many couples save a lot of money by having smaller weddings with fewer guests.
#5. Plan your budget carefully.
It’s critical to understand how much each component of your wedding costs so you can figure out how to cut costs. The wedding venue is the single most expensive expense for most couples, costing between $12,000 and $14,000 on average. You could save a lot of money by having a wedding in your backyard or in a rustic barn.
Wedding Loan Calculator
You can use a personal loan calculator to estimate the interest rates and loan amount to see how affordable your wedding loan payment is.
You can use the personal loan calculator to figure out how much money you can borrow for your wedding. It is also a useful tool that allows you to enter the interest rate for a specific loan duration and calculate the amount you will have to pay each month to repay the loan.
Importance of a Personal Loan Calculator for a Wedding Loan
The personal loan calculator is an important financial tool that can help you understand how much money you can borrow for your wedding. It assists in determining your loan’s monthly payments and making wise financial decisions. Furthermore, you can keep changing the loan amount, interest rate, and repayment terms in the boxes to see how different types of those amounts might be beneficial for your situation.
How to use the Loan Calculator for Your Wedding Expenses
The loan calculator can figure out how much your monthly payments will be for the personal loan you used to pay for your wedding. All you have to do is:
- Enter the loan principal amount
- Interest rate
- Loan term
- Click calculate to instantly see your estimated monthly payment.
You can experiment with the variables in the boxes to see how different personal loan amounts affect your monthly payment and the total interest you’d have to pay.
Best Wedding Loan
To help you narrow down your options, we’ve compiled a list of the best wedding personal loans. We examined the most competitive loans, as well as 25 critical data points. Here’s how to choose the best wedding loan to pay for your big day.
#1. LightStream
Trust Bank’s online division, LightStream, offers wedding loans with rates as low as 5.73%. (with autopay and excellent credit). The company promises to outperform any competitor by at least 0.10%. Borrowers with excellent credit may be eligible for loan amounts of up to $100,000.
#2. OneMain Financial Services
OneMain Financial, which has more than 1,400 locations, gives people with bad credit wedding loans. The company provides unsecured and secured personal loans with APRs starting at 18%, and some borrowers may pay an origination fee of up to 10%. OneMain Financial does, however, provide quick funding and the ability to prequalify.
#3. SoFi
Wedding personal loans are available from SoFi, an online finance company. The company provides exclusive member benefits and rates as low as 7.99%. You can borrow up to $100,000 and benefit from SoFi’s unemployment insurance policy.
#4. Marcus
If you’re looking for wedding debt consolidation, Marcus by Goldman Sachs is a good option. With a personal loan of up to $40,000, the company may pay your creditors directly. Those who want to borrow money and have good to excellent credit may be able to get interest rates as low as 6.99%.
#5. Best Egg
Best Egg is another well-known online lender, with rates starting at 7.99%. The company provides personal loans for life’s major events, such as your wedding. If your existing loan with Best Egg is in good standing, you may borrow between $2,000 and $50,000 and apply for a second loan.
Wedding Loan Benefits and Drawbacks
Pros
- Quick funding: Personal loans can be funded quickly — usually within a week, but sometimes on the same business day that you apply.
- Credit reporting: Because most lenders report payments to the three major credit bureaus, you can build credit as you make on-time payments to pay off the loan.
- Lump sum: You receive the funds all at once, which can help you stay within your wedding budget.
- Monthly payments are fixed: Because wedding loans have fixed interest rates, you make the same payment each month. When you shop around, you can compare offers from different lenders to see which can provide you with the best monthly payments for your budget.
Cons
- Rates are determined by your credit: Your credit score is a major factor in determining whether you are approved for a loan and what interest rate you receive. A poor credit score may result in a high annual percentage rate. Lenders will also use your debt-to-income ratio to determine whether you can afford the monthly loan payment.
- Long loan terms: With a personal loan, you could be repaying it for up to seven years. Think about how long you want to pay for your wedding after the honeymoon.
How do I finance my wedding?
If you need to borrow money to pay for a wedding, there are a few steps you must take before the funds are transferred to your bank account.
- Determine your credit score.
- Obtain prequalification.
- Evaluate lenders.
- Select a lender and fill out an application.
- Collect your money.
Does a loan help your credit?
If you have mostly revolving credit, such as credit cards, a personal loan can help you improve your credit mix. Assisting you in establishing a payment history: Making on-time personal loan payments helps to establish a positive payment history, which can boost your credit score.
Does personal loans affect credit score?
A personal loan will reduce your credit score temporarily, but making on-time payments will restore it and help you build credit. The important thing is to repay the loan on time.
Does paying back loans build credit?
In any case, repaying a loan is generally beneficial to your finances. By paying off the loan, you get rid of a financial burden, stop paying interest, and give yourself more money to work with. Also, your total debt will go down, which will help your credit score in the long run.
How do you check your credit score?
AnnualCreditReport allows you to request a free copy of your credit report from each of the three major credit reporting agencies-Equifax®, Experian®, and TransUnion®-once a year.
What happens if you pay off an installment loan early
A prepayment penalty is a fee charged by some lenders when borrowers pay off all or part of a loan before the agreement’s term expires. Prepayment penalties keep people from paying off their loans early, which means the lender loses out on interest income.
Conclusion
When compared to the cost of credit card debt, a wedding loan can be an affordable way to pay for your big day. However, you must consider the risks of a personal loan as well as your ability to make the payments. If it feels like too much, you may want to consider other options, such as extending your engagement, reducing your wedding budget, or asking for gifts.
Wedding Loan FAQs
Which is best marriage loan?
- Tata capital wedding loan.
- HDFC wedding loan.
- ICICI bank wedding loan.
- Bajaj Finserv marriage loan.
- Kotak Mahindra bank marriage loan.
How much loan can I get wedding?
The loan amount and tenure: With an HDFC Bank Personal Loan for a Wedding, you can borrow between Rs 50,000 and Rs 40 lakh over a 12-month to 60-month period.
Which is better marriage loan or personal loan?
Increased interest rate: Because a wedding loan is an unsecured loan, you are not required to keep collateral with the bank. As a result, marriage loans have higher interest rates.
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