There are many ways to pay for your wedding day, but many times family and savings simply aren't enough. No matter the size of your budget, the one constant is where your cash will come from.
While it was customary for the bride's parents to foot the bill in the past, most couples finance their own nuptials today.
A reasonable, realistic budget is the essential first step. And like any major expense, good, old-fashioned saving is the best way to pay for a wedding.
But, you also have to be reasonable and realistic about the bills. Regardless of the budget and plan, you'll have a lot of them.
While most people think of loans as reserved for cars and houses, there are numerous borrowing options out there – like the wedding loan.
It's simply a kind of personal loan, but made with the newlywed in mind. It's also an excellent alternative to credit.
A wedding loan can cover the expenses you simply can't at the moment, but will be able to afford with a little time. Many offer special rates, terms, and even bonuses to make the debt manageable in the first years following the vows.
Why should you use a wedding loan?
Wedding loans generally come with low rates intended to take a little bit of the financial pressure off of newlyweds. In addition, some financial institutions offer a bonus of up to a few hundred dollars for taking the loan out as a symbolic wedding gift.
Couples with good credit will likely receive an unsecured loan that doesn't require collateral. Keeping one or both spouses' assets out of the equation naturally expands financial breathing room.
It's true money issues, namely debt, can cause a lot of stress in a relationship. Some personal finance professionals advise against taking on personal loan debt for that reason.
But, as with any loan, you should borrow responsibly. Taking out a $30,000 loan to cover the entire celebration is probably not a good idea. The best way to use a wedding loan is to fill the gaps.
Your wedding budget must come first.
A realistic budget is a critical step in the entire wedding planning process. The Knot suggests this basic breakdown as a starting point:
- Reception: 48-50 percent
- Ceremony: 2-3 percent
- Attire: 8-10 percent
- Flowers: 8-10 percent
- Entertainment/Music: 8-10 percent
- Photography/Videography: 10-12 percent
- Stationery: 2-3 percent
- Wedding Rings: 2-3 percent
- Parking/Transportation: 2-3 percent
- Gifts: 2-3 percent
- Miscellaneous: 8 percent
This is a good estimator, but by no means a definitive list. There are dozens of costs to consider when planning for the Big Day.
Why not use a credit card?
Credit cards, especially those with short-term 0 percent annual percentage rates can be particularly attractive for newlyweds-to-be. It can also be particularly troublesome when you quickly rack up debt that could take many years to pay off once that promotional APR disappears and a variable rate kicks in.
A high-limit credit card may make you more tempted to stray from the budget, opting for upgrades that only cost "a little more." Remember, it will cost "a lot more" a decade from now.
Wedding loans, on the other hand, give you a lump sum to use as you need it and where it makes sense in the budget. In fact, it helps keep things on budget, as you only have a limited amount to work with.
How should you use your wedding loan?
Once you have your budget laid out, you've estimated how much money you can save, and put a dollar figure on what you need, you're ready to apply for a wedding loan.
You might want to use it as quick cash to pay upfront costs like deposits for the church or reception venue that are often due more than a year in advance. You might use the wedding loan to reserve plane tickets and make reservations for your dream honeymoon.
When you're filling the gaps, you may just want to designate a few specific categories where using the loan would be most helpful. As outlined above, food and drink eat up a lot of the budget and medium-sized necessities like photography, entertainment, and flowers can add up quickly.
If, for example, the reception is the most expensive item, you might want to apply for that particular amount. Conversely, maybe you've saved for the big stuff and just need to cover the many smaller expenses.
You might also keep the lump-sum loan for cash on hand – a "just-in-case" fund ready to cover any unforeseen costs.
Can you get a wedding loan with bad credit?
While the rate and term will not be as favorable, you can get a wedding loan with bad credit.
If your FICO score's over 680, you're in good shape. If it's under, your approval process may be a bit more difficult – but not impossible.
Peer-to-peer lending sites bring together private lenders who make personal decisions on who and what to fund. Basically, it's a chance to explain yourself.
If you prefer brick-and-mortar, credit unions make great options. Not only do they generally carry lower rates than banks on unsecured loans, but they also tend to make decisions locally.
That means your FICO score won't be the only criteria considered when reviewing your application. Your credit union loan officer advocates on your behalf if your credit's less than ideal.
Where do you get a wedding loan?
Careful budgeting and diligent saving are best for your Big Day. But, if you need quick cash for a key contract or even just an emergency fund, wedding loans are the best alternative.
Credit unions work with couples so they can celebrate their marriage as the life-changing milestone it is. Big expenses or bad credit shouldn't get in the way. And you deserve the good rates, flexible terms, and great bonuses that come with wedding-specific lending.
Talk with a professional at your credit union or bank to learn more and get on your way to planning the Big Day!