It’s no secret that weddings can be expensive affairs. The average cost of a wedding ceremony and reception was around $19,000 in 2020, down from $28,000 in 2019, but will return to pre-pandemic levels in 2021, according to The Knot’s Real Weddings Study. While these numbers are likely on the high side—a few expensive outliers can easily skew an average, and survey respondents were excited enough about their weddings to join a website and answer questions—paying for a wedding can be a tall order.
To afford a memorable event, some couples turn to wedding loans. While you have several options for borrowing money to pay for a wedding, including personal loans marketed as wedding loans, taking on debt may not be the way you envision starting your shared future. Let’s review how wedding loans work and how to decide whether to borrow money to pay for your special day.
Definition of a Wedding Loan
A wedding loan is a loan you use specifically to pay for the costs of getting married. In most cases, it’s a marketing term. Wedding loans are simply personal loans, and just like any other personal loan, you’ll qualify based on your creditworthiness. Lenders use terms like wedding loans, engagement loans, and bridal loans to attract soon-to-be newlyweds, but you can use any personal loan to pay for a wedding.
Loans you can use to pay for your wedding are available from a variety of sources. As soon as you begin searching for these products, you’ll see a variety of dedicated online wedding lenders. Banks and credit unions also offer personal loans you can use to finance wedding-related costs.
Before you take out a wedding loan, get quotes from at least three different lenders. Compare the features such as interest rates and origination fees but remember a wedding loan is merely a personal loan, so be wary of add-on fees.
Pros and Cons of Using a Loan for a Wedding
Allows you to plan your dream wedding without budget constraints
May have lower interest rates than credit cards
Allows you to avoid borrowing money from family members
Lets you keep your savings for other expenses
Requires a monthly payment
Comes with interest charges, which may be higher for borrowers with low credit scores
May encourage overspending
Doesn’t offer payment protection
May not be the most affordable option
- Allows you to plan your dream wedding without budget constraints: You can have everything you want—for better or worse—without compromising based on the cash you have available.
- May have lower interest rates than credit card debt: If you have good credit, you can potentially get a loan with a fixed interest rate that’s lower than most rates offered on credit cards.
- Flexibility: Wedding loans allow you to pay for virtually anything related to your special event with a single loan: venue, catering, engagement ring, and more.
- Allows you to avoid borrowing money from family members: A lender can provide the funds you need with no emotional strings attached. This could be appealing if you’d prefer to avoid borrowing from family or if that’s not an option.
- Lets you keep your savings for other expenses: A wedding can easily deplete your savings toward a down payment or another financial target. Taking out a wedding loan could help you keep saving toward other goals.
- Requires a monthly payment: Adding another monthly cost to your budget could be a burden, especially once the honeymoon is over and you realize how long you’ll be paying for your celebration.
- Comes with interest charges, which may be higher for borrowers with low credit scores: Using a wedding loan means everything will cost more than the numbers on the invoices: You’ll also pay interest on those costs, possibly for several years. If your credit score is on the lower side, the interest rate could be up to 24.99%.
- May encourage overspending: Lenders may offer you a loan of more than you’d actually planned to spend on your wedding, which might influence you to increase your wedding budget.
- Doesn’t offer payment protection: When you get a loan, you’re responsible for paying off the debt regardless of what happens on your wedding day. Credit cards, on the other hand, might offer valuable buyer protection. For example, if a photographer or caterer doesn’t show up, you may be able to dispute that bill with a credit card issuer.
- May not be the most affordable option: If you have excellent credit, you might be able to take advantage of a 0% credit card promotion. Borrowing money this way—and paying off the balance within the promotional period—could eliminate your interest costs.
Taking out a wedding loan will increase your debt-to-income ratio. If it gets too high, it could be harder for you to qualify for a mortgage or other loans.
How to Get a Loan for a Wedding
Applying for a wedding loan is just like applying for any personal loan. You’ll provide personal details and information about your earnings, and lenders will review your credit and income (sometimes almost instantly), then offer you a loan amount and interest rate. Many online lenders offer quotes after a soft credit check, so you can request multiple quotes without worrying about your credit score.
What Costs Can a Wedding Loan Cover?
During the application process, you might be asked how you’ll use the funds. However, any personal loan—even ones not specifically marketed as wedding loans—can be used to cover wedding-related costs:
- Engagement and wedding rings
- Dresses and suits
Lenders typically offer a maximum amount available to you, but you don’t need to borrow that much. Remember that you’ll have to repay every dollar—plus interest—so it’s smart to minimize your borrowing.
What to Look for in a Wedding Loan
If you decide to borrow money, make sure your loan includes features that make the debt as manageable as possible.
Your wedding loan should be unsecured, so it’s not tied to any collateral. It’s risky to borrow against your home, for example, because your lender could foreclose on it if you can’t keep up with the payments.
Low, Fixed Rate
The lower your rate, the better. You’ll pay interest on the loan balance until it’s gone, and those interest charges increase the total cost of your wedding. A fixed rate makes it easier to budget for your monthly payments. If you don’t get a fixed rate and the interest rate rises, your monthly payment will increase.
A short loan term (the length of time you have to pay off the debt) helps you minimize interest costs. When you let debt linger for months or years, you keep paying interest. A shorter term results in higher monthly payments, but you’ll get out of debt sooner.
While it’s easy to focus on the total amount you’re borrowing, make sure the monthly payment fits into your monthly budget. You can potentially get a lower payment by extending the loan term, but that will lead to higher interest costs.
Total Interest Costs
Figure out how much you’ll pay in interest over the life of your loan. You might never notice the interest costs, but they’ll keep adding up until you’ve paid off the balance. A personal loan calculator or loan amortization table can help you analyze your loan options.
Alternatives to a Wedding Loan
Taking out a wedding loan isn't your only option. Here are some other ways you can tie the knot without taking on an unreasonable debt burden.
Budget and Save
Unless you’re getting married next month, you have some time to plan ahead. Create a wedding budget and start setting money aside to cover those costs. Pay for as much as you can yourself. You can also combine this option with taking out a smaller wedding loan to help you afford a special splurge, like your dream photographer.
Ask Family and Friends for Help
Not every couple wants to ask their friends and family to help pay for their wedding. But crowdfunding is an option to consider, or you could ask your guests for cash instead of gifts.
Your friends and family members might also be able to offer their time and skills, so you don't have to pay for every aspect of your wedding. Maybe your cousin has a beautiful property you could use for the ceremony, or your friend has serious hair and makeup skills.
Consider holding off on those expensive engagement and wedding rings. Start with something you can afford now and plan to upgrade later in life, perhaps on a significant anniversary or whenever your financial situation allows.
You might have to make difficult decisions about your wedding day, but think about what’s most important to you and your spouse-to-be. Focus on making those aspects shine and cut costs elsewhere. Your guests will remember the general feeling of the day, not the specifics of what kind of chair you chose for the ceremony.