Wedding Loans: Compare Your Options

Weddings can be extremely costly. The average cost of a wedding was $33,391 in 2017, according to a survey by The Knot. According to The Knot, costs dipped slightly last year primarily because people are having less formal weddings. However, the average cost per guest has hit an all-time high of $268 as brides and grooms splurge more on amenities.

If you’re financing some or all of your own wedding, you’ll need to figure out where the money is going to come from. Wedding loans are one funding option. Below, you can find out everything you need to know about wedding loans, so you can decide if this approach is best for your big day.

On this page:

• What is a Wedding Loan?
• Where to Find Wedding Loans
• Pros and Cons of Using a Personal Loan for a Wedding
• Alternatives to a Wedding Loan

Advertisement

Learn More

on LightStream’s secure website

Wedding financing from 5.74%* APR with AutoPay

• Pay for everything wedding-related, at a low interest rate
• Loans funded as soon as the day you apply

What is a Wedding Loan?

Some lenders specifically offer “wedding loans,” which they market towards brides or grooms. However, there’s no reason couples necessarily need one of these specialized loans. 

In fact, a wedding loan is simply a personal loan that you decide to use for your wedding expenses. Many different lenders, including local and national banks, credit unions, and online lenders offer personal loans.

By not restricting yourself to specialized “wedding loans,” and just shopping around among many different personal loan lenders, you may be able to get an offer with a better loan term and better interest rates.

Personal loans can vary in terms of credit history and credit score requirements, monthly payments and the limits on the loan amount, so it’s necessary to do comparison shopping.

>> Read More: Compare the Best Personal Loans

Where to Find Wedding Loans

Shop around carefully among the various lenders to compare all the different options. Here are some examples of lenders that could offer you competitive financing, particularly if you have excellent credit or good credit. 

SoFi

You can apply for SoFi personal loans online and get an answer within minutes. SoFi Personal loans offer:

• Loans between $5,000 and $100,000
• Fixed rate loans with an APR between 6.79% and 15.49% APR, if you sign up for autopay.
• Loans with no fees, including no origination fees
• Repayment terms of 2-7 years

LightStream

LightStream is one of a small number of lenders that actually offers a dedicated wedding loan for your wedding budget. The loan offers:

• Loans between $5,000 and $100,000
• Fixed rate loans starting with the lowest rates of 5.34% APR with autopay
• Loans with no fees, including no origination fees
• Repayment periods between 24 and 84 months

LendingClub

LendingClub connects you to investors who will finance your loan. With LendingClub, you can expect:

• Loans up to $40,000
• Loans with an APR between 6.95% and 35.89%
• A one-time origination fee of 1% to 6%
• Repayment options of 30 or 60 months

Prosper

Prosper is an online lender providing affordable personal loans with fixed interest rates based primarily on your credit report and credit score. If you borrow from Prosper, you can expect:

• Loans between $2,000 and $40,000
• Low fixed rate loans: You can estimate your rate on Prosper’s site
• A one-time origination fee of 2.4% to 5% depending upon your Prosper Rating
• Repayment options of 3 or 5 years

Pros and Cons of Using a Personal Loan for a Wedding

While you have ample options for personal loan lenders and financial institutions who will give you the cash you need to have a dream wedding, think very carefully before you decide to go into debt.

To decide if using a loan for a wedding actually makes sense, you should weigh the pros and cons.

Some of the advantages of a personal loan to fund wedding costs include:

• Lower interest rates: It will usually cost you less to use a personal loan to fund your wedding than to put your costs on a credit card. 
• Amazing memories: You’ll hopefully have just one wedding in your life. You may decide it’s worth it to borrow the money you need to make memories.

Some of the disadvantages include:

• Starting your married life with debt: Money is one of the leading sources of stress in a relationship. When you start your married life owing a lot, you’re only adding fuel to the fire and you may be setting yourself up for bad credit in the future if you can’t afford the loan payments. 
• Delaying other financial goals: When you’ve borrowed for a wedding, you may have less money available to fulfill other financial goals, such as saving for a down payment on a house or starting a family. The outstanding balance on your wedding loan could also affect your debt-to-income ratio, making it harder to get approved for a mortgage to buy a home.
• Increasing the costs of your wedding: When you pay interest on a personal loan for a wedding, you’re essentially increasing the cost of everything you finance. If you pay 10% interest, everything you’ve bought is about 10% more expensive. Weddings already cost a fortune, so try to minimize interest.

For many couples, the financial cons often outweigh the pros, but these life-event decisions are often made based on emotion, so they typically borrow anyway.

Alternatives to a Wedding Loan

Before you decide a wedding loan is the right choice for you, consider all the alternatives. Instead of taking a personal loan for your wedding, you could:

• Reduce costs: You don’t have to spend a fortune to have a great wedding. Look for ways to cut expenses so you can afford to pay out-of-pocket. For example, maybe you could get married at your alma mater or at a national park for less than the cost of a fancy venue.
• Save up and pay in cash: If you aren’t getting married for a while, create a line item in your budget to save to pay for what you need in cash. Also, consider taking on some extra work or a side gig to help you save the funds you need for your dream wedding.
• Use a 0% interest credit card: If you can get a card with a 0% promotional APR, you may be able to charge what you need for your wedding without paying interest.
• Tap into the equity in your home: You could use a home equity loan or a home equity line of credit to borrow against your home. The interest rate on a home equity loan or line of credit will usually be lower than a personal loan rate, so this option could be more affordable. But, it’s often a bad idea because you put your home at risk if you can’t pay it back.

Bottom Line

Taking on thousands of dollars in debt through wedding loans just to have one amazing day often doesn’t make any sense for your personal finances.

If you want to do the practical thing, avoid borrowing for your wedding and do what it takes not to borrow. But, if you’re determined to have your perfect day just as you envision it and need a wedding loan, just remember it will cost you. So, compare your options.