With many weddings costing in excess of $30,000, it easy to understand why you might consider getting a loan to pay for the celebration. The good news is that you may be able take out a personal loan for a wedding. Before you do, it is important to consider the amount you want to borrow and how you plan to repay the loan.
Look at the Big Financial Picture
As with any loan, before you commit, you want to be sure that you can understand and comply with the repayment terms of the loan. As a couple, you may have new debt such as a home mortgage, or old debt like student loans. Make sure you have an idea about the extra monthly payment you’ll need to include in your budget before you take out a personal loan for your wedding.
Decide How Much You Will Need to Borrow for Your Wedding
It is important to request preliminary quotes from the vendors you might hire for the wedding. To the extent applicable, you will want to include the venue, catering, photography, music, florist, printing, wedding gown, tux rentals, and whatever else you think you will need to make your dream day come true. Then calculate how much you are able to contribute to the cost along with whatever contributions your parents or other relatives might offer. Subtract the money you plan to pay from the cost estimate to decide if that final number is an amount you’ll be able to borrow and pay back.
What Are the Terms of the Wedding Loan?
Be sure to research the lender and understand the terms of the loan. Aspects you should consider are:
- Reputation of the Lender
- Amount of the Loan
- Interest Rate
- Application and Origination Fees
- Secured or Unsecured Loan
- Prepayment Penalties
Will Wedding Gifts Cover Some of the Wedding Costs?
Since many people give money as a wedding gift, you might expect many of your guests to do the same. Although you shouldn’t try to compute an exact amount and you should not rely on these donations for your budget, understanding that you are likely to receive monetary gifts may ease your mind. When the wedding is done and the first wedding loan payment comes due, you may be able to pay toward the principal of your loan balance and potentially make a large initial prepayment towards the money you owe.
Do You Foresee an Increase in Your Income?
If you anticipate that your income will increase over the next couple of years, you may be able to pay off your loan early. Make sure to consider a loan with no prepayment penalties so that if you do get a raise, bonus, or tax refund, you may be able to pay off the loan more quickly to potentially save money on interest.
1. Stay Within Your Budget
Regardless of whether you decide to take out a wedding loan, it’s easy to spend more than you anticipate. Decide what’s most important to you and follow these few suggested guidelines to help prevent the costs from soaring out of control:
2. Set Your Priorities
Make a list of “must haves” and “nice to haves.” For example, some brides might want a designer dress while other couples think the location and dinner should be the top priority. Do you want a large wedding or a small one? A live band or a DJ? Open or cash bar? There are a lot of decisions to make. Once you make them, you can establish a budget and choose everything else accordingly.
3. Chose an Alternate Date
Want to save money from the start? Consider choosing a day that isn’t the most popular day of week or month of the year. With many venues playing catch-up after the pandemic, wedding demand is soaring. The number of weddings in 2022 is expected to hit a 40-year high. With all that competition, you can look to save money if you’re flexible about the day of the week and time of year.
Set Up a Website
You can save money on printing and postage by using a personalized website to communicate with guests. You might want to send out an actual invitation, but all return correspondence can be done online. You can also let guests know if you’re registered for gifts or prefer cash to put towards the wedding or honeymoon.
By carefully setting up a budget and sticking to it, you can choose a loan that fits your budget, your life, and your future. Want to learn more? Contact Mariner Finance today to inquire about a loan for your wedding.