9 mn read

Wedding Loans in the USA: Financing Your Big Day

Marriages mark an important event in many people’s lives. They are the representation of two people coming together at the beginning of their joint life path. Nevertheless, as much as people love celebrating weddings, the costs required in planning are always overwhelming. Even choosing a location, meals, dress code, services of a photographer, and an orchestra can turn out to be rather expensive. For those couples who do not have the means to pay for these expenses, there are always wedding loans to help them realize their dreams.

So, in this 2019 complete guide, I will give you more information about what wedding loans are, the functioning of the wedding loan type, the availability of wedding loans for people with poor credit scores, and other options to fund your wedding. Finally, we will explain why it is more rational to use short-term financing, such as Fast Loan USA, for relatively small and urgent purchases rather than for a wedding.

Characterizing Wedding Loans

A wedding loan can be defined as a type of personal loan that is, more specifically, common among people who want to finance their wedding ceremonies. Like any typical personal loan, it involves obtaining a loan capital from a financier and then choosing to make equal installments to pay back the amount borrowed together with interest over a definite time. The sources of the wedding loans are the traditional banks, credit unions, and the credit facilities available online.

Why Couples Turn to Wedding Loans

Even though couples can plan for a wedding and save money until the do day, most go for loans since they either cannot wait or would prefer it if the wedding happens as soon as possible. Given that a simple average wedding in the USA costs up to $28,000, depending on the recent polls, saving this amount may take a lot of time, not to mention the presence of rent, student loans, or other expenses.

Besides, weddings require multiple expenses, which are usually paid before the wedding day, and it can be challenging to make those payments. Facility rental, catering, flower blooms, and photography charges are some expenses that are required to be paid a month or weeks before the wedding, thus making the monetary options more appealing to the couple without enough savings.

How Do Wedding Loans Work?

Just like personal loans, wedding loans work similarly. Just like most other loans out there, when you apply for a wedding loan, the financier looks at your credit limit and your income level, among other factors, to approve the loan and the terms of repayment. After being okay, you get a single amount with which you can finance your wedding and then start paying back the loan in equal monthly portions for a fixed period.

Here are the key elements of how wedding loans work:

1. Loan Amount

The actual amount that can be borrowed depends on several factors, including credit rating, income, and the provider’s income. The typical loan amount for most personal loans in the USA falls between $1,000 and $50,000, with some lenders extending higher amounts for qualified borrowers.

2. Repayment Terms

Repayment time usually varies between one year and five years, depending on the loan amount and the service provider. While borrowers whose credit scores are relatively high can select longer repayment periods, those who have poorer scores have fewer options and higher interest rates.

3. Secured and Unsecured Loans

Wedding loans don’t require any warranty to secure a loan. In the case that you are unable to repay your loan, the lender cannot take legal action to recover his money by confiscating your property. Nonetheless, due to the higher risk associated with unsecured loans, they entice more interest rates than other form of loans. The total amount of money spent on arranging a wedding depends on the number of guests expected, location, and personal tastes. Loan rates in the USA range between 5% and 36%. Borrowers with excellent credit (scores above 750) can secure rates as low as 5% to 10%, while those with poor credit may be subject to higher rates, often between 20% and 36%.

4. Secured and Unsecured Loans

Wedding loans are typically unsafe, meaning they don’t require insurance, such as a home or car. However, because unsecured loans present more risk to lenders, these types of loans are provided with higher interest rates compared to secured loans.

Wedding Costs: Breaking Down the Expenses

The costs associated with a wedding can vary significantly based on the location and individual preferences. Below is a breakdown of typical wedding expenses in the USA:

1. Venue

Location is usually the costliest charge that the couple would have to meet for their wedding. The same source indicates on average, the price a couple is likely to incur for a venue in the USA is a staggering 10000$. This is comprised of the rental fee, chairs, tables, and sometimes food and drinks.

2. Catering

Catering services cost some of the most for a wedding, averaging $50-$150 per guest on food and drinks alone. Depending on the size of catered events, for a wedding with one hundred persons, this may reach five thousand to fifteen thousand dollars.

3. Wedding Attire

Wearing that beautiful wedding dress, choosing the suitable groom’s tux, and the outfit of other bridesmaids can run up a bill. The average cost for a wedding dress in the USA today stands at about $1,600, whereas designer gowns can cost about $5000 on average.

4. Photography and Videography

Many couples need to capture memories of their big day; wedding photographers can range from $2,000 – $5,000, and having a videographer can cost an additional $1,000 – $3,000.

5. Entertainment

If you are hiring a DJ, wedding entertainment may be cheaper, but a live band may cost between $1,500 and $4,000. This price can widely depend on the place, talent, and how long the performance will take.

6. Floral Arrangements

As discussed earlier, flowers are a significant part of wedding decor. Wedding flowers can cost anything between $1000 to $2000, though going for extra services like exotic flowers will cost much more.

7. Wedding Rings

In many cultures, the engagement ring and the wedding rings are bought separately; the couple’s wedding bands range between $500-$5000 depending on metal choice and engravings.

Wedding Loans for Bad Credit

This is because, for most lovers, lousy credit will challenge their odds of accessing a wedding loan. Most conventional financial institutions base their lending decisions on credit scores to know whether to approve an applicant. With low credit ratings, borrowers often wrestle to receive wedding loans at relatively moderate interest, or they may be turned down completely.

1. Finding Lenders for Bad Credit

The best news is that there are unsecured loan companies that lend to people with poor credit. Unlike ordinary lenders that use credit score as the main factor for approving these loans, these lenders base their decision on other factors like your income, employment history, and overall financial status, among others. They may still give out wedding loans, although the interest rate will usually be slightly higher in order to cover the higher risk.

2. Cosigning Options

Having a co-signer with a good credit history is also an excellent way to get a wedding loan approved when your credit rating is low. A co-signer actually accepts to repay the loan in case you are unable to repay it, so this has a positive effect on the lending decision at the credit union. But even by getting into a co-signed account, you are equally likely to get a lower rate of interest.

3. Secured Personal Loans

Wedding loans, unfortunately, are primarily unsecured; therefore, if you are considering a personal secured loan because your bad credit rating is preventing you from getting an unsecured one, this might work for you. You may take along your car or home equity, and we will get you a better rate from the lenders due to the reduced risk involved. However, secured loans involve the danger of losing specific valuable property if a borrower fails to pay for the loan.

4. High-Interest Loans

Before moving further, it is essential to realize that wedding loans for bad credit holders involve high rates of interest. Although everyone would love to agree to pay for the wedding through a loan, you have to ask yourself if you would be able to afford the repayments. A high interest rate very much increases the cost of your loan, and if you have a hard time meeting your repayment schedules, you might end up getting deeper into the debt hole.

Alternative Ways to Fund Your Wedding

Although wedding loans are pretty standard, getting one is not the only way you can pay for your wedding expenses. Here are some alternative ways to cover wedding expenses:

1. Save Up Over Time

This is probably the easiest, if not the longest, way of sourcing funds for your wedding. Another way through which couples can save towards their wedding expenses is by setting a monthly wedding saving target. For instance, if your target saving is $20,000 and you have 24 months until your wedding, then your approximate monthly saving must be $834.

2. Cut Costs and Budget Smartly

As lovely as it is to walk down the aisle in the dream wedding attire surrounded by beautiful flowers and fancy decorations, many couples have been able to execute their dream while not necessarily spending much by making smart reductions. This is always good advice, as venue prices drop when you get married on a weekday or during the low season. Reducing the number of guests to be entertained also helped to reduce the costs of catering, transport, and hired items.

3. Crowdfunding

When it comes to differentiating between ways of getting contributions to their wedding, crowdfunding has emerged as one of the most successful ways of getting money from family members and friends. Sites such as GoFundMe enable you to establish a page through which you can form a story and summon people to offer their support towards your wedding fund.

4. Credit Cards

Some couples end up using credit cards for wedding expenses. Though this option is flexible, one needs to be careful with the use of credit cards. This can be a costly way to borrow if you’re unable to pay off the balance in full every month because the interest rates on credit card balances are relatively high.

5. Borrow from Family or Friends

Most of the lovers prefer to have an agreement with kin or relatives whereby they do not have to go for formal credit. These include negotiable repayment periods, making it ideal if you have a good rapport and an agreed time frame on how to repay the cash. However, it must be noted that the strategy is necessary to use such loans with respect and without driven personal relations.

6. Home Equity Loans

As a credit product, a home equity loan offers more money to homeowners at a lower rate compared to personal credit or credit cards. This type of loan is usually referred to as a second mortgage, and it has lower interest rates because your house secures it; however, defaulting a payment means you lose your home.

Eight Reasons a Wedding Loan Might Not Be the Best Idea

Although wedding loans can make it easier to pay for your wedding, they are not always advisable for this special occasion. Purchasing for a wedding can result in long-term debts if appropriate measures are not taken. One more thing to keep in mind is that couples have time for dreams, and every plan should be discussed with their financial needs: for example, having a wedding loan to buy a house in the near future.

1. Strain on Future Finances

After the wedding, young couples can experience particular difficulties in meeting loan obligations if they take more money than they can repay. Any loan, including wedding loans, has monthly installments, which are payable for a few years at most for personal loans, depending on the amount borrowed.

2. Interest Accumulation

The interest rate depends on one’s credit score; if you get a loan to pay for the wedding, you could be spending thousands of dollars in interest on the loan alone. If you are in a position to repay other forms of debt, like studying credit card debts, then taking on another debt might cause so much pressure.

3. Social and Organizational Issues

Even as couples look forward to the joyous process of the wedding, they should first consider if it is wise to start a new chapter with a new family in debt. Unlike birthday celebrations or other ceremonies that are only held once in a lifetime, it’s essential to practice financial responsibility when preparing for a wedding because handling financial responsibility in the next minutes of the wedding may build up stress.

Fast Loan USA May Be a Better Fit for Emergencies

Whereas wedding loans are for more extensive sales, short-term loans that exist in Fast Loan USA are for more short-term, small contingencies. It is important to note that unlike mortgages or car loans, which are used to meet huge costs like a wedding, these loans are meant to offer some financial assistance in case of emergencies.

1. What We Offer

We provide instant short-term loans of up to $1,500 with loan periods of 3 – 12 months. They also are not for significant events like weddings but are perfect when you drain your wallet for car repairs, medical bills, or any other home emergencies.

2. Easy and Quick Procedure of Application

It offers the ease and quickness of an online application, which we have made even more accessible for a candidate. After applying, our credit and affordability checks help ensure that every individual can handle the loan well. You can get the money within a short period after the approval, hence making our loans suitable for needs that arise with a lot of urgency.

3. Credit/Income and Price Acceptability Analysis

At Fast Loan USA, we are concerned about lending with integrity. Borrow only what you are comfortable repaying is the philosophy our credit and affordability checks provide. There is less likelihood of falling into a debt cycle, which may come about if consumers borrow what is more than they can handle.

4. Personal Customer Care

Compared to most other comparable lenders that use robotics to process applications, Fast Loan USA provides every applicant with a unique Customer Care Manager. The human element enables us to offer highly personalized service and assist borrowers who, despite having a worse credit rating, can indeed prove their ability to repay.

Conclusion

Indeed, a wedding is one of the bright and inexpressible emotions that take place in everyone’s life, but it is crucial to have a financial strategy for this event. On the one hand, if you apply for a wedding loan successfully, you will be able to pay for the ceremony of your dreams; on the other hand, there will be long-term expenses that should not be overlooked. If you have bad credit or do not want to borrow money and take high risks, there are other options, such as crowdfunding or saving for a long time.

So, at Fast Loan USA, we understand that with weddings, there can be many other costs that our short-term loans cannot accommodate. But if you have some other unforeseen financial issue that has no connection with the wedding, our fast loans are designed to help.

Before proceeding with it, you should think not only about the lovely day you are going to spend with your loved one but also about your future married life and your financial situation. In choosing your wedding loan or considering other ways of paying for a wedding or reception, it is crucial to plan for a financially sound future.