Wedding loans: financing your wedding and honeymoon

Bet you can't say "wedding" without smiling. (You just tried it, didn't you?) But figuring out how you'll pay for this happy day can be stressful.

Are you leaning toward a big celebration that involves family and friends? Or going with an intimate vibe? Either way, knowing how you'll cover the expense can lower the stress of planning and allow you to enjoy this special day even more. A wedding loan could help you avoid dipping into retirement savings or relying on a high-interest credit card.

What is a wedding loan?

A wedding loan is a type of personal loan aimed at helping you cover wedding costs. Usually, a wedding loan is unsecured, meaning it's not tied to an asset like your car or your home. Your credit scores, income, and existing debt all factor into whether you qualify and the rate you're offered.

When you get a personal loan, you get the money as a lump sum and then repay the loan in equal payments over a set period of time. Personal loans, including wedding loans, typically range from around $5,000 to around $50,000, but you might find smaller or bigger options. The repayment period is generally two to five years.

What can you use a wedding loan for?

A wedding loan can often cover most of the expenses related to getting hitched, including:

• Venue fees (including deposits)

• Wedding apparel (including the dress and/or tuxedo)

• Music (live band or DJ)

• Decorations

• Flowers

• Party favors for guests

• Fee for the officiant

• Wedding rings

• Save-the-date announcements and invitations (including RSVP cards)

• Costs associated with setting up a personalized wedding website

• Food and catering costs (including the wedding cake)

• Services related to the wedding (including hair and makeup, photographer and videographer)

• Fees for a wedding or event planner

• Rehearsal dinner

• Honeymoon

Your total cost depends on what services you use, the venue and how many guests attend. No matter your plans for the big day, a wedding loan can help you put together an event to remember.

Is it a good idea to borrow money for a wedding?

Your personal goals and financial resources will dictate whether it's a good idea to borrow money for a wedding. Here are some of the potential advantages of using a personal loan to pay for your wedding:

• Affordable payments can help you manage cash flow without the need to deplete your savings.

• A lump sum gives you flexibility and ready cash for planning.

• A wedding loan typically has a lower interest rate than a credit card.

How much can you borrow for a wedding?

Many lenders offer loans of up to $50,000 to cover wedding and honeymoon expenses. The exact amount you can borrow will depend on your credit score, your income and how much other debt you have. You may be able to get enough funding to cover all of your wedding costs.

If you don't use all of the money, you might be able to repay it early. This is a good reason to make sure your lender doesn’t charge a prepayment penalty.

What to look for in a wedding loan

Here are some important things to consider when evaluating a wedding loan:

• Interest rate: The interest rate is what it costs to owe money. The lower it is, the less interest you'll pay. Shop for the best interest rate possible, based on your credit score.

• Loan term: This is the repayment period for paying back your loan. Many personal loans allow you to choose a term between two to five years. Longer terms have a lower monthly payment, but shorter terms could save you money in interest charges. Look for a repayment schedule that works for your budget.

• Prepayment penalty: This is a fee some lenders charge if you pay off your loan ahead of schedule. Avoid personal loans with prepayment penalties, even if you don't expect to pay off your loan early. If it turns out that you can pay off your loan early, you don't want it to cost you.

• Funding speed: With Achieve Personal Loans, you could get your money as soon as the next business day after you apply. With the money in your bank account, you can start planning and locking in vendors.

How to apply for a wedding loan

Once you've decided a wedding loan fits your plans, the process is refreshingly simple. Here's how it works, step by step.

• Prequalify and check your rate. Prequalification for an Achieve Personal Loan uses a soft credit inquiry. A soft inquiry does not affect your credit scores. We let you check your estimated rate, risk-free, before you commit. Ask every lender whether prequalification uses a soft credit check.

• Compare your offers. Line up each offer on APR, fees, term length, and funding time.

• Choose the offer that fits your budget, then finish the application. Pick the terms you can comfortably repay and complete the full application.

• Get your funds and start planning. If you’re approved, once the money lands in your account, put it toward the venue, the honeymoon, or whatever you need to reserve first.

When a wedding loan might not be a good idea

A wedding loan isn't the right choice for everyone. Before you get a wedding loan, consider whether the following situations might apply to you:

• Paying off the loan would put excessive strain on your personal finances.

• Your loan might lead you to delay or cancel other important financial goals.

If you can handle it without putting other goals at risk and the payments are manageable, a wedding loan can be a good way to get the money you need to cover your wedding and honeymoon expenses.

Alternatives to a wedding loan

If a wedding loan isn't the right move for you, there are other ways to pay for a wedding. Here are some strategies to consider:

• Create a wedding savings account and set money aside each month.

• Ask vendors like your venue or caterer whether they offer payment plans.

• Ask family and friends to help with costs, including setting up a crowdfunding page.

• Use a home equity loan or HELOC instead of a personal loan to cover your wedding costs.

• Find ways to reduce your wedding budget.

It's also possible to use a combination of strategies to cover your costs. You might be able to use some of your savings and get help from family, and then use a wedding loan to make up the difference.

Next steps towards lining up your wedding loan

If you decide a wedding loan will help you afford the celebration you've hoped for, here are the next steps to take:

• Check your credit report to find out whether there are steps you could take to improve your credit standing before you apply for a loan

• Figure out how much you'll need to borrow to fund your wedding

• Prequalify with lenders who use a soft credit check

• Compare rates, fees and repayment terms

• See how the monthly payments of the loan would fit your budget

• Once you've found the right loan, review the agreement carefully

• Sign the agreement and get the loan funded

• Spend the loan money carefully, to make sure you don't spend more than you have available

Oh, and one more thing—enjoy your big day!