What’s more expensive: planning a wedding or buying a new car? If you have guessed marriage, you are right; The average cost of marriage in the United States was $38,700 in 2019, with a new set of wheels delayed by $36,718.
Just like most people need financing to pay for a new car, many are turning to payday loans as a source of financing for their marriage. In fact, the Washington Post reported that marriage loans from 2018 to 2019 had increased by 400%. But are wedding loans the best way to finance your marriage? What are the other funding options for weddings?
What is a wedding loan?
A wedding loan is a certain type of personal wedding loan that is sold to engaged couples who plan a day that they cannot afford in cash. These loans are easy and quick to apply; Many lenders will even approve it online in minutes.
Some couples can use a wedding loan to finance parts of their big day, for example, B. update restaurants while others use the financing to pay for everything. The interest rates on these loans vary. Some are shorter than credit cards, which makes them more attractive to young couples, others can go up to 30%. On average, couples seem to borrow about $16,000 and spend three years paying it back.
When does a wedding loan make sense?
It’s easy to get carried away with planning your dream wedding, especially under the constant influence of social media platforms like Instagram and Pinterest. But don’t take out a wedding loan to increase your overall budget just because you can. When you decide to borrow for your wedding expenses, consider the importance of having an additional budget.
If you need to fund your wedding to invite loved ones and loved ones, it’s probably a good idea. If you’ve just missed a wall of donuts and custom handwritten invitations, you should think twice if you can easily adjust the cost to your budget.
Since wedding loans are unsecured, you have nothing to mortgage. This is the good news. But it also means that lenders are more selective as to who they lend to. So you need a fantastic credit history to get a reasonable interest rate. If your credit score is not exactly where you want it, you could get a much higher interest rate than alternative financing options like a credit card.
Advantages and Disadvantages of Wedding Loans
Benefits of Wedding Loans
- Unsecured Loans Don’t Risk Your Assets
- Flexible credit check does not appear in your credit report
- Interest rates are sometimes lower than those of credit cards.
- Repayment period of three to five years.
Disadvantages of Wedding Loans
- In addition to what you already have, you may need to take on more debt.
- Interest rates can be high, especially if you don’t have good credit
- Wedding loans are often used to spend unnecessary improvements and optional extras
