Wedding Loans: Compare Your Financing Options

» MORE: Find an unsecured personal loan

What is a wedding loan?

A wedding loan is an unsecured personal loan. With a wedding loan, you borrow money from a bank, credit union or online lender and use the funds to pay for the wedding and other related expenses, though technically you can use the loan to pay for anything. You pay back the loan with monthly payments that include interest, usually over a few years.

Wedding loan pros and cons

Pros

• Fast funding: Personal loans can be funded quickly — usually in less than a week, but sometimes as fast as the same business day you apply.

• Credit reporting: Many lenders report payments to the three major credit bureaus, so you have the opportunity to build credit as you make on-time payments to pay the loan off.

• Fixed monthly payments: Wedding loans have fixed interest rates, so you make the same payment each month. When you’re shopping around, you can compare offers from different lenders to see which can offer you monthly payments that best fit your budget.

» MORE: Calculate your personal loan payments

Cons

• Rates depend on your credit: Your credit is a major factor in determining whether you get approved for a loan and what rate you get. A low credit score could lead to a high annual percentage rate. Lenders also use your debt-to-income ratio to asses whether you can afford the monthly payment on a loan.

• Long terms: You could be repaying your loan for up to seven years with a personal loan. Consider how long you want to pay for your wedding after the honeymoon is over.

Cost of a wedding loan

Unsecured loan APRs range between 6% and 36%. An average wedding in 2019 cost $33,900, according to The Knot’s 2019 Real Wedding Study. The higher your loan amount, the more money a low interest rate will save you.

Say you get a three-year loan for $16,950 — half the average wedding cost. On the low end, a 6% APR would have monthly payments of $516 and cost $18,563 overall.

That same loan with a 36% APR would have monthly payments of $776 and cost $27,949 overall.

» MORE: Calculate your wedding’s cost

How to qualify for wedding loans

Borrowers with the strongest credit typically get the lowest rates on personal loans. Consider these options to boost your chances of qualifying and receiving a low rate.

• Check your credit reports: In addition to paying your bills on time and keeping debt levels low, check your credit reports for errors, like accounts that aren’t yours or inaccurate data. You can dispute the errors online or by phone.

• Add a co-signer or co-borrower: You can add a co-signer to the loan, or you and your partner can co-borrow the loan. Adding someone to your application with better credit or a higher income can help improve your chance of approval and even get you a lower rate.

• Pre-qualify for multiple loans: Rates and terms vary between lenders, so consider pre-qualifying with a few to compare offers. Pre-qualification typically involves a soft credit inquiry, which has no impact on your credit score. You can pre-qualify on NerdWallet and see estimated rates from multiple lenders.

Wedding loan alternatives

Compare other options for financing your wedding so you can celebrate your big day feeling confident you’ve made the right financial choice.

Here are some alternatives to a wedding loan.

Savings: With a long enough engagement, you and your partner may be able to save up to cover the cost of the wedding, interest-free.

Financial experts don’t recommend incurring debt for discretionary expenses, like a wedding. Instead, estimate your wedding’s cost and then choose a strategy for saving.

0% APR credit cards: You may be able to pay for the entire wedding interest-free with a 0% APR credit card. The zero-interest promotional period on these cards typically lasts about 12 to 18 months.

You usually need good or excellent credit (690 or higher FICO) to qualify for this type of card. Be mindful of the card’s typical APR, which will take effect if you can’t pay the balance during the promotion.

Rewards cards: You can put some of your expenses — like the dress and decorations — on a rewards credit card and potentially get cash back. A travel rewards card could help you put money toward your honeymoon, too.

These cards also require good or excellent credit to qualify, and you may not get rewarded for all of your expenses. But they’re an option if you’re going to use your own cash to cover some of the costs.

» MORE: Credit card offers for the newly engaged

Downsize: If you can’t qualify for a low rate on a personal loan or credit card and don’t have savings, consider a loan from a friend or relative.

You can also try to pare down the guest list or find other ways to save on your wedding.