4 Tips on How to Use a Personal Loan to Finance Your Wedding
Everything you need to know about taking a loan for your wedding
The cost of planning a wedding can climb to astronomical heights, making it difficult for the average couple to plan for the wedding of their dreams. For this reason, more people are turning to personal loan services to fund their special day. Personal loans require no collateral, so you can receive the money you need without putting down a security deposit.
Is a personal loan the right choice for you?
We’ve put together everything you need to know about financing your special day.
1. Ask yourself: Do I Need It?
Before you send out those applications, decide whether or not a loan the right choice for you. In general, consider taking out a personal loan to finance your wedding if:
- You want/need access to a large cash sum that you can use however your choose
- You don’t want to juggle several different payments consecutively at different interest rates (such as various vendors or multiple credit card bills)
- You want to pay off your debt gradually
2. Crunch the Numbers
Making a budget will give you a more realistic idea of how much your wedding day will actually cost. Start by:
- Making an itemized list of what will be required for the big day. This should include vendors, apparel, transportation, and other expenses. Some items to remember are venue, band, flowers, dresses, hotel, honeymoon, photographer, wedding favors, rings, and unexpected expenses.
- Do some research into how much these things cost in the real world. You can go online, go into stores, and ask friends. Do your research and find the best deals.
- With a realistic price bracket in mind, make up your own budget. Decide together with your partner how much you are willing to spend on each area of the event. Some things may be more important to you (ex. a large dance floor or colorful floral bouquets), while others will be less (ex. a smaller band or an inexpensive photographer).
3. Understand Loan terms
A personal loan affords you the flexibility to access a large sum of money at one time with the ability to pay it back over a long stretch of time. This ensures that you can pay it back responsibly and without feeling the financial strain of a major debt. It’s important to look for a loan that affords you the most reasonable rates and flexibility.
The most relevant term to understand is the APR. This is an aggregate of how much you will pay on top of the actual loan amount. A personal loan APR (annual percentage rate) can range from as little as 5% to as high as 35% depending on your credit history, loan amount, lender, and length of loan repayment. The higher the APR offered, the more you will have to pay out over time. While lending marketplaces like LendingPoint can get you some pretty low APRs, if you qualify.
Also, look for a lender that has good repayment terms, this way, you won’t be stuck with astronomical monthly payments that you can’t afford. For example, LendingTree provides loans up to $35,000 and allows you to take out contracts as long as 180 months, so your monthly repayments can be quite reasonable. This will allow you to pay off your loan in relative ease.
4. Know all of your options
There are hundreds of options online, so don’t grab at the first offer you receive. Instead, weigh the options before you to see which one gives you the most advantages. Services like AmOne are trusted loan aggregators, so you can receive multiple offers simultaneously and compare the terms for the most beneficial one possible.
Depending on your specific situation, a personal loan can be the answer for your wedding day blues. First, read our reviews of the top lenders. Then, calculate the numbers, see what kind of terms you can get, and decide together with your partner if this is the best decision for you. Then, finally, go out and make that dream day come true.