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Are Wedding Loans a Good Idea?

Written by
Zina Kumok
A dedicated personal finance writer, Zina Kumok has been covering financial topics for almost 10 years. She has been nominated three times for the Plutus Award for best personal finance contributor or freelancer.
Read time: 8 min
Updated on March 12, 2024
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For many couples, their wedding day is a chance to celebrate their love with family and friends - and a bank?

Weddings have only gotten more expensive recently. According to wedding planning website The Knot, the national average wedding cost $35,000 in 2023. And, depending on where you live, a typical wedding could cost closer to $40,000 or more.

And, if you're like most people, you just don't have that kind of cash up front. However, if you still want the expensive wedding of your dreams, you may find yourself considering whether to  take out a wedding loan.

Before completing a loan application, make sure you understand what taking out a wedding loan means, how much it will cost you, whether you can repay it, and how to qualify.

What is a wedding loan?

There is no specific type of loan known as a wedding loan. Instead, a wedding loan is simply a personal loan that you can use for wedding-related expenses. Like any other kind of personal loan, a wedding loan may have a high-interest rate because it is not secured, meaning it is not backed by any collateral.

Brides and grooms often take out wedding loans because their costs may exceed what they budgeted. If they can’t afford to pay for those expenses in cash, they may need to use a loan.

The repayment term for a personal loan usually lasts between one and seven years, but this depends on the specific lender. Also, some lenders have rules about how long the repayment term can be depending on how much you’ve borrowed. For example, if you only borrow $3,000, you may not be able to take out a five-year loan.

Wedding loans may offer fixed or variable interest rates. However, fixed rates are more common. A fixed interest rate means that the payment will stay the same throughout the entire loan term, whereas payments on a variable-rate loan may change over the life of the loan.

Personal loans also place limits on how much you can borrow. If you're taking out a loan for a wedding, you need to make sure that you'll qualify for enough. Most loans are capped between $25,000 and $100,000.

How much will a wedding loan cost you?

Wedding loans may have higher interest rates, especially if you have poor credit. Having a high-interest rate can cause you to pay thousands or more in interest.

For example, let’s say you're spending $20,000 on a wedding and take out a $10,000 loan. If the loan has a three-year term and a 25% interest rate, you'll end up paying $4,313.54 in interest. That’s almost half of the amount you originally borrowed.

When applying for a loan, you should check to see how much interest you'll pay over the entire term. If you're comparing similar terms between different lenders, then you'll be able to pick the best option.

What happens if you default on a personal loan?

Just like with any other type of loan, you have to make your payments to stay current on your wedding loan. If you don't, you may end up defaulting.

Because a personal loan does not have any collateral, the lender can’t repossess anything if you default. However, your credit score will likely take a huge hit. Even one late payment could cause you to suffer a 100-point drop in your credit score. Defaulting can cause your score to tumble hundreds of points.

Alternatives to using a wedding loan

Even if you feel like a wedding loan is your only option, you may be surprised at other financing choices you have. Here are other options you should consider:

Use a credit card with 0% Annual Percentage Rate (APR)

Credit cards have a reputation for having higher interest rates than personal loans. However, that isn't necessarily the case if you can find a credit card with 0% APR. Still, you should proceed with caution.

Some credit cards have special promotional offers where you will not have to pay interest for a set period of time, often between six and 18 months. Once the promo period expires, you'll start being charged interest on the remaining unpaid balance, if there is any.

However, if you can pay off most or all of the balance before that offer expires, you'll have essentially avoided paying interest on the amount borrowed. Sounds great, right?

Qualifying for a 0% APR offer usually requires having good credit and a solid income source. It can be more difficult to qualify for one of these cards if you don't have good credit.

If you have a 0% APR offer on a card and the special period expires while you still have a balance on the card, one option is to transfer the balance onto a new credit card offering 0% APR on balance transfers.

The only downside with this strategy is that you will have to pay a balance transfer fee, which typically ranges from 3% to 5% of the balance. However, the transfer fee may be worth it if you don’t have less expensive options and can repay part or all of the balance before the 0% APR offer ends.

Skip the registry

Nowadays, more couples are getting married later in life so they don’t need a set of silverware or special towels. Instead of registering for items that you don't need right now, you might be better off asking for cash instead.

If you do have a cash registry, you can use the money you get from the wedding to pay down your wedding loan. The key is to pick a wedding loan that doesn't charge a prepayment penalty.

A prepayment penalty is when the lender charges a fee if you repay the loan ahead of schedule or before a certain time. Lenders make money when they charge you interest, so if you pay off the loan early, that means they'll get less money from you.

Many credible lenders do not charge prepayment fees, but you should still double-check before you take out any loan.

Payment plan with vendors

If you still have wedding bills to pay, you may be able to negotiate a payment plan with your vendors. Not all vendors require that you pay them 100% of the bill upfront. Instead, you might be able to get away with paying a little bit now and the rest shortly before the wedding.

How successful this strategy is will depend on the individual vendor. If you have yet to select your vendors, you might consider asking them about payment plans before you sign up.

Start a crowdfunding campaign

If you need a wedding loan because other expenses have come up, you could consider starting a crowdfunding campaign to cover those other expenses. For example, if you lost your job and can’t afford to pay for the wedding anymore, you could consider using a site such as GoFundMe to raise money to cover your everyday costs until you can find a new job.

Don't start a crowdfunding campaign for the wedding, though. People won't take it seriously, and they may find it insulting or crass that you're asking them to help pay for your big day.

Postpone the wedding

If you've just lost your job, had a major medical emergency, or suffered another setback, you may think that taking out a loan is your only way to pay for your wedding without losing all your deposits.

However, you may be able to postpone the wedding without paying an extra fee to your vendors - as long as you reschedule with them for a later date. This can ensure that you don't lose your deposits, but you also don't have to pay the remaining amount due until a later date. Note: some vendors may still charge a postponement fee, but this may be less than your deposit.


What is the typical interest rate for a wedding loan?

Interest rates on personal loans can often be up to 36%, and rates will often vary depending on the loan amount, repayment term, and the applicant’s credit score. For example, if you’re borrowing $10,000 with a five-year term, you’ll likely pay more interest than if you're borrowing $5,000 with a two-year term.

If you want a lower interest rate, see if you can add a cosigner to the loan. A cosigner is an adult who becomes legally responsible for your loans if you default.

How to choose the right lender for a wedding loan?

When picking a personal loan, it's crucial to look at the APR and not only the interest rate. The APR reflects both the interest you're going to pay, as well as any fees. Personal loans are more likely to have fees than other types of loans, so it's even more important to compare the APRs.

Comparing repayment terms is also important because those can have a huge impact on the interest rate you’ll qualify for. Always look at the total amount of interest you’ll pay over the life of the loan.

Are wedding loans a good idea?

If you ask any financial expert, they'll tell you that taking out a loan for a wedding can be a dangerous strategy. When you take out a wedding loan, you’re often paying a high-interest rate on what is effectively a discretionary or non-essential event.

And, even if it might seem like paying off a wedding loan will be easy, it can also lead to you dangerously spiraling into debt. That's not the way you want to start off a married life.

Is there a good time to take out a wedding loan?

Taking out a wedding loan will always be risky because you never know what your future finances will look like. For example, if you're about to start a new job, taking out a wedding loan can be risky. Your new employer might change their mind, and you may struggle to pay off your debt without a stable job.

And even families that have promised to pay for weddings have reneged, not out of spite or malice, but simply out of financial necessity. Don’t count on money that you don’t have to pay off your wedding loan.


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