Finance 101
Plan Your Wedding Effectively with Installment Loans
Couples today are spending more money than ever to tie the knot. In 2023, the average wedding, including rings, is estimated to cost $34,000.
Let that sink in for a minute. What’s it really mean? Half the getting-married population is spending less. But the other half is spending more.
One option to help with the costs is a wedding installment loan, a personal loan for wedding expenses. This is just a personal loan for any wedding costs, from the caterer to the venue to the honeymoon.
Most personal loans for weddings don’t require collateral (property you offer the bank if you don’t pay the money back) and have a fixed APR (annual percentage rate of interest). While credit cards let you spend as you go, a wedding installment loan gives you the cash upfront. Just make sure you estimate how much you need with a thorough wedding budget so you know what amount to ask for.
When should you get an installment loan for a wedding?
Is a wedding installment loan right for you? There are plenty of things to consider.
First, your best move is to plan your wedding based on what you can afford. If there’s any room in your budget to save, set that money aside for the wedding expenses during your engagement period.
If you want or need to take out a personal loan for wedding expenses or the honeymoon, be sure you can pay off the loan in a reasonable amount of time. Ask yourselves, does the payment fit in our budget? Your credit score may affect both the amount you can get, the time you have to pay it off, and how much interest you’ll pay for the loan.
You’ll want to evaluate your wedding spending in other ways, too. What’s worth more to you? Starting a marriage with a great party, or starting a marriage without debt? Do you want to buy a house together? If so, do you have money for both or do you need to prioritize your savings? Everyone has different priorities. Just be sure you understand yours as a couple.
Also, be careful with Pinterest. While it can be an amazing way to get ideas, don’t let it rope you into thinking you “need” things you don’t. You could be paying off items you didn’t even really love (ice sculpture, anyone?) for months after your wedding. That puts a dent in your future.
It’s ok to start with a list of likes or wants. But then go back to your budget and see how much you can afford. Sacrifice where you need to until you’re within the budget. If you’re going to borrow, decide how much you can afford to repay monthly and stick to that amount.
Benefits of taking wedding loans
To determine if a wedding installment loan is the best option for you, you can also take a look at the benefits. For example, a personal loan for wedding expenses may allow you to have your “dream wedding” without worrying so much about the money.
A personal loan for wedding expenses may allow you to keep your savings intact (say, for a house) while paying the wedding off as part of your monthly budget.
A wedding installment loan can also be a good alternative to borrowing from your family or asking your parents to pay your wedding bills. In some situations, using a wedding loan to pay for your big day can give you more control over arrangements.
Personal loans for wedding expenses are generally very flexible, with most allowing you to pay for almost any wedding-related expense. And since most allow an early payoff without penalty, you can plan to pay extra each month to save on interest. With a wedding installment loan, you can even put the money you receive as a wedding gift directly toward the wedding expenses.
Lastly, a wedding loan may offer you lower interest and cost you less over time than using a credit card, depending on your credit score, the loan you choose, and the terms of your credit card. For some, the most expensive debt they have is credit card debt.
Look carefully at these benefits – and several loan offers – to determine what’s best for you and your financial future as a couple.
How to apply for a wedding installment loan?
Applying for a wedding installment loan, or a personal loan for wedding expenses isn’t difficult. Just follow these basic steps:
- Gather your personal information. Like with any loan, you will need to present certain documents when applying for a wedding loan. These can differ by lender, so pay attention to what’s required. Documents may include a driver’s license or passport, a recent pay stub, a birth certificate, social security card, and even a utility bill.
- See how much you need. As mentioned above, you’ll want to run a thorough wedding budget so you know how much you want to borrow. Make sure the monthly payments will fit into your budget.
- Compare loans available to you. Most lenders can do a “soft” credit check (which does not affect your score) to see how much you may qualify for. This is sometimes called getting “pre-qualified.” Look at the amount, the interest rate, how long you have to pay the loan back, and the monthly payment. Once you’ve evaluated your options and selected the best fit for you, it’s time to officially…
- Apply with the lender you choose. That lender will do a “hard” credit check (this is for an actual application, and can affect your credit score). Then the lender makes a decision. If you’re approved, you get your money and begin your monthly payments as agreed.
Tips for comparing wedding loans
Comparing wedding installment loans is a lot like comparing anything else. Do research with multiple, trusted sources. Look at lender reviews just like you would look at a seller review for an Amazon purchase. Compare the interest rates and terms offered by different lenders for personal loans for weddings. Check for any fees or penalties, like a loan origination fee or early payoff penalty. If you want another opinion, ask someone whose financial sense you can trust for their suggestions.
FAQs: Wedding Installment Loans
Can I get a wedding installment loan for bad credit?
As with any loan, your credit score is an important factor. There are some things you can consider to improve your credit score. You may qualify with one lender but not another. Just keep in mind that the lower your score, the more limited your options may be for a personal loan. You may also qualify for less money, less time to pay the loan back, or a higher interest rate if you have a low score. Be sure to explore your options. Check out our blog on installment loans for bad credit to learn more.
How does a wedding loan affect your credit score?
A wedding installment loan will affect your credit score the same way any personal or unsecured loan does. Your score may drop immediately following your application, but if you make all payments on time for all your debts, your score should bounce back within two to six months.
Are wedding loans a good idea?
Depending on your needs, a wedding installment loan can be a useful option. Just remember, money issues are the number one cause of conflict in marriages, so it pays to carefully consider all financial decisions. Only the two of you can determine what works best for you and your married future.
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