Loans for Weddings
What does your dream wedding look like? Perhaps it’s just you and your beloved saying, “I do,” on a white sandy beach? Or do you want all of your friends and family gathered in one spot? Whatever your vision, with the average cost of a wedding in the UK loitering at the £27k level, you may be looking for some extra cash to fund your plans.
If saving up for a few more years is out of the question, a wedding loan could help you make those upfront payments and deposits for caterers, venues and dresses. So if you need to top up your nest egg to pay for your nuptials, could a wedding loan work for you?
What is a Wedding Loan?
A wedding loan is a personal loan taken out with the specific intention of funding your wedding day. You may want to borrow a few thousand pounds to give your own savings a boost, or need a larger amount to cover all the costs. . In essence, a wedding loan is simply a personal loan used for a specific purpose, in the same way that a personal loan for a car, holiday or home improvements may be desired.
A typical wedding loan may be between £10 and £15k, paid back over five years. As an unsecured personal loan you would pay back your loan provider an agreed amount each month to cover the original sum borrowed, plus a fixed rate of interest. This means it should be easy to budget when paying back your borrowing.
Loans for weddings: a summary
- Personal loan that will be used for a wedding
- Unsecured loan
- Typically fixed rate of interest
You should always aim to pay back a loan in the shortest time possible while keeping payments affordable. You don’t want to risk not being able to make payments, as this could lead you onto the dark path of financial problems.
Compare Wedding Loans
If you want to compare wedding loan options, how do you go about selecting a product that’s a good fit? Our MoneyMatcher gives you a great head start. With the click of a button we’ll summon selected loans tailored to your requirements.
You can pay back your loan over a longer period and you’ll have lower monthly payments, though it’ll likely cost you more in total thanks to accumulating more interest. Agreeing a shorter loan period, paying less in interest and being free of your debt sooner, can be an attractive prospect once the big day itself is all done and dusted.
Interest Rates for Personal Loans
Generally speaking, interest rates are lower for larger amounts because lenders recognise these will be paid off over a longer period, giving them more opportunity to earn some interest. Don’t let this tempt you into significantly upping your borrowing. After all, anything you borrow you still have to pay back!
It is worth checking amounts either side of the sum you want to borrow though. For example, if you know you need £9,700 to pay your suppliers, check loans for £10,000 too. You may find that due to lower interest rates, the overall amount you pay back is less. The extra money could fund your minimoon, or make the difference between toasting with cava or champagne. Plus, the lower payments will be welcome when you’re settling into married life.
The interest rates available to you will depend on your credit worthiness as individuals. To get the best rates you’ll need a good credit rating and may need to fulfil other criteria too. Remember that representative rates are called representative for a reason. When you see a loan advertised, the representative annual percentage rate (APR) must be available to at least 51% of people accepted. So, with 49% not qualifying for that rate, it may not be the one you’re offered if your application is successful.
Other Fees for Personal Loans
Other things to look out for include arrangement fees that can bump up the cost of borrowing. Arrangement fees are normally included within the APR. You may decide that you’d like to direct any generous monetary gifts from guests towards paying off your debt earlier. With this in mind, you don’t want nasty surprises in the form of redemption fees. Some providers also offer payment holidays, allowing you a bit of breathing space when you come back from your honeymoon, which you may want to put on your desirables list. Be careful to check this within your loan terms and conditions and to stick to payment dates even if you’ve negotiated a payment holiday. Even one missed payment can have an affect on your credit rating.
Is a Wedding Loan Right for Me?
Having the wedding you want without borrowing might mean cutting back on day guests or delaying your “I dos” for a year or two. Perhaps you could have your wedding now and honeymoon later? If you’ve not got quite enough saved, you could also look at other ways to raise capital, such as freeing your house of junk by carbooting or selling stuff you don’t use online. This has the bonus of freeing up space for lovely wedding gifts. Or, you and your partner could look at increasing your income through taking a second part-time job while you save.
There are occasions when weddings really won’t wait though. If you do decide that borrowing is the way to go, you’ll need to be confident that you can manage your debt well because starting married life with financial difficulties can add up to a whole lot of stress.
Alternatives to Wedding Loans
Before you fire off loan applications in all directions, think about whether you might be able to use 0% periods on credit cards to pay for things instead. Checking payment dates and accepted payment methods with your suppliers is a great way to start. If your suppliers must be paid in cash, consider using a 0% money transfer credit card to transfer funds into your account. There is a fee for this but it’s likely to be lower than a loan, so do check what’s available to you. Don’t be tempted to use the card for other spending, or to let your debt run over into a higher interest rate.
It’s worth mentioning that paying for goods and services by credit card can give you some extra peace of mind. This is thanks to the protection offered under section 72 of the goods and services act when you purchase something costing £100 or more on your card. You don’t need to have paid the full amount on your card either – though it must be a minimum of £100. Remember also that you can get married for far less than the national average – see our infographic on how to get married for under £1000 here.
An affordable wedding loan can be a convenient way to fund your special day. If you decide that taking out a loan is the right option for you, think hard about how you will feel paying back those pounds once the event is over. If you’re sure it’ll all be worthwhile, take the plunge and let our MoneyMatcher work its sorcery to find wedding loans for you.