Credit Sesame on love in the time of debt or how a personal loan can help fund your wedding.
You want your special day to be absolutely right. For many couples, the joy of a wedding often competes with the dread of figuring out how to pay for it. According to Zola, a wedding planning website, the average cost of a wedding in 2023 is $29,000 up from $28,000 in 2022. Most people don’t keep nearly $30,000 hanging around and a personal loan can be a helpful option. It can cover expenses, maintain flexibility and keep your budget intact.
What are the benefits of a personal loan for your wedding? How do you choose the right loan? What terms should you consider? How can you minimize overall expenses along the way?
Key benefits of a personal loan to fund your wedding
If you do not love financial drama, a personal loan can save you time and headaches. There are several reasons why.
You have lots of choices with personal loans. Your existing bank likely offers these products. Many more options are available online via personal loan providers.
Personal loans offer flexibility. You can use the funds from a personal loan for a wider range of expenses than for other loan types, such as auto loans (used to purchase vehicles) and mortgages (used to purchase houses). This extends to cover costs such as dress and tuxedo rentals, catering, facility fees, honorariums for your officiant, and so on.
Personal loans offer compatibility. This means a personal loan can pair well with cash savings or a credit card. That provides full-circle financial resources to fund your wedding.
Finally, personal loans generally can be obtained more quickly than other types of loans, such as a mortgage. If you’re newly engaged and holding your wedding in the next few months, the accessibility of a personal loan can help you expedite the planning process.
How to shop for a personal loan to fund your wedding
As with other types of debt, it’s important to consider your financial objectives and personal boundaries when shopping for a personal loan. Keep these criteria top of mind.
- Interest rates. Determine the interest rate and whether it is likely to increase. Ask for a fixed rate whenever possible. This ensures a predictable monthly payment. Most personal loans have a fixed rate, but it’s always a good idea to double-check.
- Term. This refers to the number of months you spend paying off your personal loan. Generally speaking, ask for a shorter term with higher monthly payments so long as you can afford to make them in full. This helps you pay off your personal loan sooner with less interest.
- Fees. Depending on your personal loan provider, you might have additional costs to assess. For example, some banks or online services might charge processing fees or expenses for getting copies of statements via physical mail.
Fund your wedding without breaking the bank
You can plan an incredible wedding without losing sleep over how the dollars flow. Follow a few steps to ensure peace of mind throughout the planning process.
1. Start with the end in mind
Write down a number that represents your preferred all-in wedding cost. Factor in everything, including food, photography, clothing, travel, lodging and everything else. Talk through the full budget with your partner and agree on that target number. No matter how you end up financing your nuptials, it is wise to have a unified purpose and a clear goal to guide the rest of your decisions.
2. Check all your money pots
Options are always an advantage when you’re planning for a big expense. Consider all of the ways you might fund your wedding to keep costs in check and cover all expenses. For example, do you have some cash set aside in savings? Do you have a credit card that could be used for smaller-scale purchases? These can supplement a personal loan and help you focus on borrowing only what you need.
3. Avoid too many personal loan inquiries
From a credit perspective, remember that it’s good to have several types of debt, it’s not good to make too many applications for loans in a short period of time. Do your research and assess all possible lenders before applying for a personal loan. This works in your favor. You apply only for a loan that fits your personal financial situation. And you avoid too many credit inquiries, which can damage your credit score.
4. Evaluate repayment options
Your personal loan specifies exactly what you owe each month. That doesn’t mean you need to stick with the minimum payment, though. Work with your partner to determine if you can afford to pay a little extra. This can help you get out of debt sooner, leaving you basking in the glow of a fully funded wedding.
5. Look two steps ahead
Most big life events have a few unexpected turns along the way. Perhaps that venue is more expensive than you realized. Or maybe additional family and friends plan to attend your after-wedding dinner. Whatever the case, think ahead about the possibility of extra costs or hidden savings. This can give you and your partner the confidence to keep taking the next step in the wedding planning process without extra heartache or heartburn.
Whatever your wedding adventure brings, a personal loan can help you shore up your budget, anticipate the costs and create an experience to remember.
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Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.
