Planning for your wedding is both emotional and magical at the same time. You want to be deeply involved and make all the right decisions. Secondly, you want to make it unique and personalize it to the extent that it reflects the personalities of you and your partner. However, weddings are expensive and may leave a major dent in your savings. If you do not want to compromise and do not want to ask your family for financial help either, you can consider the option of wedding loans.
What is a wedding loan?
There is not much difference between a wedding loan and a personal loan. You can use a personal loan for any purpose like repairing your house or paying for a medical emergency. Some banks have started packaging a personal loan for marriage as a wedding loan. Similar to personal loans, these loans also come with high-interest rates. Some banks also give you the option of choosing between a fixed or a variable interest rate. While a loan with a variable interest rate may seem promising, for now, you may have to pay hefty interest rates in the future.
Wedding loans are generally long term loans and may extend from a period of three years to seven years. Most banks will allow you to pay off your loans earlier than the full term. A wedding loan in unsecured, which means you won’t have to put up any collateral to avail the loan amount.
While selecting a wedding loan, it is a good idea to shop around to get the least interest rate and best services.
Who should consider a wedding loan?
Had your parents promised to pay for your wedding but don’t have the cash now? Had you put aside some money for your wedding but are now planning to take a course to change your career path? These are some situations that may put you in a fix and leave you with little money for your wedding.
Anyone can apply for a wedding loan but the key is in knowing if you will be able to repay it in time. Loans are easy to get but it may become a challenge to pay them off. Especially, when you are about to get married. You are going to take on more responsibilities and your expenses are only going to rise.
If you and your partner have a steady income and know that the loan will not interfere with your lifestyle, you may very well go ahead with it. However, if you stuck on that Vera Wang dress but do not know how you will repay your loan, it may not be a good idea to sign up for a wedding loan. After all, apart from causing financial problems, such a situation can jeopardize your credit rating and future prospects of getting any loans.
How much can you borrow for your wedding?
Different banks have different wedding loan plans. While some of them offer as low as $5000, some banks out there are willing to extend a hefty sum up to $100,000. However, they will consider factors like your income and lifestyle while deciding the loan in your case.
What are the benefits of taking a wedding loan?
- You can have the wedding of your dreams and also proudly say that you did it all by yourself.
- Wedding loans are easy to get and you can even apply online.
- The amount can land in your bank account within a day allowing you to pay for urgent expenses. For instance, booking a venue or holding a florist.
- The interest rates on wedding loans can be lesser than the rate on your credit card. Besides, maxing out your credit card is never such a good idea.
- Paying your wedding loan in time can help you build a good credit score.
What are the disadvantages of taking a wedding loan?
Easy money can disorient you and you may end up paying more than you had accounted for.
You may have to change your lifestyle to arrange for the EMIs. This can put your other financial goals on the backburner.
You may have to pay some extra fees for the paperwork associated with the loan.