To many, their wedding day is the best day of their lives. Tying the knot can be a beautiful, but expensive day. Wedding loans provide you with funds upfront to fund the celebration that you have been dreaming of, as well as your honeymoon, and pay it back in installments over a period of time after. In this guide we will look at why taking out a wedding loan may be beneficial for you, and how to choose from the best loans available to you.
In This Guide:
- What is a wedding loan?
- Should I take out a wedding loan?
- Disadvantages of Wedding Loans
- Alternatives to Wedding Loans
- How to Compare Wedding Loans Online
What is a wedding loan?
Given that the average cost of a wedding in the UK is over £30,000, and even higher if you want to go overseas, wedding loans are provided by lenders to help to alleviate the initial cost and break it down into smaller payments.
When applying for a wedding loan, you will be asked a series of questions, such as your age, occupation and credit history, so that companies can calculate how much you will be allowed to borrow and the interest rate repayments. This money can then be used to pay for costs such as dresses, venue hire and catering.
Most wedding loans are unsecured, meaning that the loan is not guaranteed against anything, but if you are a homeowner or have a mortgage, you can choose to take out a secured loan. This guarantees your loan against your property, and you will usually be able to borrow more and get lower interest rates, meaning more options for cheap loans.
Should I take out a wedding loan?
Even if you are one of the lucky people to have enough money in your savings to pay for a wedding without the need for a loan, there are still reasons why it may be a good idea to get one.
If you have a good credit rating, interest rates can actually be quite low, especially if you are borrowing less than £15,000. This will allow you to keep your savings in case of a rainy day, or put them towards other things, such as a children’s education pot.
Disadvantages of Wedding Loans
There are however, reasons why wedding loans may not work for you. If, for example, you have a low credit rating, then you may find that the rates that you will be able to get make them extremely expensive.
On top of this, wedding loan providers each have their own ‘profiles’, for the type of person they want to lend to. If you fit the profile, the likelihood of your loan being accepted increases. However, if you do not fit the usual profiles, you may find it harder to get a loan, meaning other sources of funding may be more desirable.
Alternatives to Wedding Loans
If you decide that wedding loans aren’t for you, there are other sources you could look to in order to fund your special day. These include:
- Remortgaging your home: You could remortgage in order to free some extra cash to use for your wedding. However, if you are doing this in large amounts, it is usually cheaper to get a personal loan.
- Credit card: If you only need small amounts of money upfront, then credit cards are a good option. There are a number of zero percent options available, where you do not pay any interest on a small limit of spending.
How to Compare Wedding Loans Online
When shopping for the right wedding loan for you, the best thing to do is conduct an online ‘soft search’ loan comparison, which can be done using the Money Expert UK online tool. All you have to do is type in a few details and a list of likely loans that you will be applicable for will be shown, showing the interest rates available, providing the information for you to make an informed decision on where to apply for a loan.
It is certainly worth comparing loan deals online, as applying for loans and not taking them can negatively affect your credit rating, making it harder to get cheap loans in the future.