The days of dowries are long gone for most of us, but weddings still come with a high price tag. In fact, the average cost of a wedding keeps rising. This major expense can set you back tens of thousands of dollars — and sometimes even more. Recent reports say the cost of the average wedding in 2014 cost just over $30,000. While some couples have the savings they need to fund the event and others have parents or family who are willing to foot the bill, those who don’t often turn to credit cards and personal loans to cover the cost. Learn all about wedding loans and how they may (and may not) work for you below.
The Basics
There is no real designation that separates a wedding loan from any other personal loan. A wedding loan is just a personal loan that is designated to cover wedding-related expenses. They, like all personal loans, generally can range from anywhere between $2,000 and $35,000. It’s a good idea to make sure you have a good credit score (if you’ don’t know, you can get a free credit report summary that includes two credit scores from Credit.com) and financial documents in order before you apply. To apply, you will have to submit to a credit check and go through the regular loan approval process.
The Pros & Cons
One great aspect is that you get the wedding of your dreams without emptying out your savings account(s). It can take the burden of off you, your future life partner and everyone’s parents.
Personal loans also generally have low APRs, or annual percentage rates. On the other hand, you will still be entering your new marriage with debt and no matter how low the rate, this is still debt you will have to repay. In fact, if you don’t have great credit, you may be stuck with a higher interest rate that can take well beyond your honeymoon to pay back.
There are some basic questions to consider before you make the decision to take on a wedding loan. Are you sure this one-day event is worth taking on a large amount of debt? Can the loan be repaid without too much hardship? Is there an emergency repayment plan ready in the event of income loss? Do you and your partner agree about how wedding finances are being handled? And, lastly, what after-wedding items are you losing out on as a result of potential wedding loan interest payments?
Other Financing Options
Many financial experts warn against wedding loans and there are some other ways to cover wedding costs. To avoid going into debt, you can extend your engagement and give yourself more time to save for the wedding. You can also lower the cost of the wedding by prioritizing what is truly important to you about the day and cutting back on other areas. You can take on other jobs or additional side projects to save up some money for the big day.
Your wedding day is certainly important, but it’s a good idea to take steps so it doesn’t come with a lifetime of debt. Before you figure out your financing, think about what is really best for you, your partner and your combined future.
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