Wedding loans can be a great way to cover the costs of your big day if you’re willing and able to take out financing.
It is important to:
- Save money where possible while staying within budget constraints
- Understand what types of loans there are as well as their pros/cons including interest rates etc
- Plan ahead so that any debt accumulated doesn’t pile up too high
“An average wedding in Canada cost approximately 42,400 Canadian dollars in 2017. This figure is broken down into bride and groom attire, ceremony and reception, honeymoon, and other expenses. The ceremony and reception are the most expensive subcategory, costing the loved-up couple 19,925 Canadian dollars on average.”
What are wedding loans?
A wedding loan is a personal loan for the purpose of funding your wedding. It’s always good to think of creative ways to avoid credit card debt but taking out a personal loan is not the answer for everyone. That being said – some people take out wedding loans because they need money quickly. A lot will depend on how much you’re looking at spending as well as your current financial situation; if all else fails then this might just be one option worth considering.
The Pros and Cons of Wedding Loans?
Wedding planning is expensive and can be quite overwhelming. It’s not surprising that some people turn to loans for help with their big day, but should you take out a personal loan? Let’s look at the pros and cons of doing one.
Pros of a wedding loan
- Convenience. They are a quick way to get money. Many wedding vendors require upfront deposits and wedding dresses and accessories will need to be paid for ahead of the wedding.
- Easy: Can be applied for easily online in minutes, approved and money can be transferred directly to your bank account.
- Funds Delivered Quickly: Many lenders can review your online application and provide an approval with your funds being deposited within days.
- Interest Rates: personal loans generally have lower interest rates than credit cards.
- No Penalty for Early Repayment: Some loans will allow you to repay your loan early without penalty fees, this can save you money on interest costs. This comes in handy if you are planning to pay off your loan with wedding gifts from guests.
- Credit Score: Paying off your loan on time can improve your credit score and make getting a loan in the future easier and with lower interest rates.
Cons of a Wedding Loan
- Interest: when paying back the loan you will also have to pay interest.
- Debt: starting your relationship in debt. Money can cause marital problems and stress.
- Existing Loans: existing loans use up your credit meaning that banks will look at your available credit and used credit and see if there’s room in your credit for an additional loan.
- Spend more: if you get a personal loan and have more money you may be inclined to spend more money than you budgeted for.
What are Other Ways to Cover Wedding Costs?
One way to reduce the cost of your wedding is to look into alternate financing options. There are a few different ways that you can finance your wedding, and each has its own advantages and disadvantages. Here are a few of the most popular options:
1. Credit Cards: Credit cards can be a convenient way to finance your wedding, as you can often get 0% interest for a certain period of time. However, if you don’t pay off your credit card balance in full, you will be charged interest on the outstanding balance, which can add up quickly.
2. Family and Friends: Asking family and friends to help finance your wedding can be a great way to reduce the cost of your wedding. However, you will need to make sure that you are able to repay any money that you borrow, as well as any interest that may accrue.
3. Grants and Scholarships: There are a number of grants and scholarships available to help finance weddings. You may need to meet certain criteria in order to qualify for these programs, but they can be a great way to reduce the cost of your wedding.
No matter how you choose to finance your wedding, be sure to shop around and compare interest rates and terms before you commit to any one financing option. Wedding loans can be a great way to reduce the cost of your wedding but be sure to compare all your options before you make a final decision.
FAQs on wedding loans
How much can I borrow for a wedding?
The amount you’ll be able to borrow will depend on a few factors, including your credit score, income, and debts. Generally speaking, most finance companies will allow you to borrow up to $50,000 for a wedding. However, if you have good credit and a steady income, you may be able to qualify for a higher loan amount.
Who should consider a wedding loan?
If you’re planning a wedding and don’t have the cash on hand to pay for it outright, a wedding loan may be a good option for you. A wedding loan can help you finance the cost of your big day and spread out the payments over time.
When to consider a wedding personal loan?
Before taking out a loan to finance your wedding, it’s important to assess your financial situation. If you have good credit and a steady income, you may be able to qualify for a lower interest rate and more favourable terms. On the other hand, if you have bad credit or are self-employed, you may end up with a higher interest rate and less favourable terms. Before taking out a loan, be sure to shop around and compare interest rates and terms from multiple lenders. This will help you find the best loan for your needs.
Wedding loans vs Credit card? Which is better?
If you’re looking to finance your wedding and don’t have the cash on hand to pay for it outright, you may be wondering how to best do so. Should you take out a loan or put it on a credit card? There are pros and cons to both options. Wedding loans typically have lower interest rates than credit cards. However, you’ll need to have good credit to qualify for a wedding loan. If you have bad credit or are self-employed, you may not be able to qualify for a loan. In this case, using a credit card may be your only option. Another thing to consider is that most loans require you to make monthly payments. With a credit card, you can choose to pay off your balance in full each month or make minimum payments.
Wedding loans can be a great way to cover the costs of your big day, but they come with an interest rate that may be a financial burden. The decision on whether or not taking out this type of loan will affect future financial decisions should only happen after talking things over with your partner and considering all possible outcomes- which includes both good ones (the loan gets paid back) as well as bad ones (you’re stuck paying decades worth). There are many different types of loans from various companies so do some research before making any final decisions.
References: statista.com/statistics/807306/cost-of-wedding-in-canada/#:~:text=An%20average%20wedding%20in%20Canada,19%2C925%20Canadian%20dollars%20on%20average
