Should I avoid going into debt for my wedding?
- Understand your budget and look for cost savings.
- Use some of your savings to offset your loan amount.
- Use a repayment calculator before submitting a loan application to know what your monthly repayment might be.
- Consider all of your unsecured personal loan options such as your loan term and whether you can make extra repayments or repay the loan early. With a personal loan, Finance One lets you make additional repayments and doesn’t charge early repayment fees, meaning you can pay off your loan as soon as you like and are not left with a debt hangover, well after the honeymoon ends.
Deciding if a wedding loan is the right option to cover your wedding expenses
Whether you’ve started looking yet, or have simply been to a couple of weddings in your time, you’ll likely have an idea of what the main wedding costs are.
Pros of Personal Loans for weddings
The obvious benefit of taking out a wedding loan is that you don’t need to worry about squeezing every last dollar out of your budget. You can proceed with planning in confidence, knowing that you can cover your wedding-related expenses.
Wedding loans are not secured loans, which means you have total flexibility on what you’d like to direct your funds towards. Lots of people use wedding loans to finance:
- Engagement rings and wedding rings
- The venue hire for the ceremony and or reception (this can often be one of the biggest costs)
- Wedding dresses
- The honeymoon
- Photographers or videographers
- Caterers
- Even the accommodation or travel expenses for guests
Secure your preferred vendor
Wedding vendors often request large deposits to secure your wedding date, which is why having a lump sum of money ready to secure your caterer, photographer, planner or venue of choice is important and is where accessing a personal loan for your wedding may be useful. Depending on your loan amount, you may even be able to pay the full amount upfront, which provides both yourself and the vendor the confidence that you’re fully paid, allowing you to direct your attention to other areas of your plans.
Keep your budget stable
Taking out a wedding loan means you don’t need to stress over squeezing every last dollar out of your budget to secure your preferred vendors and is often easier than trying to anticipate all of the upcoming expenses and finding the funds when the expenses come due. Understanding what your monthly repayment will be helps to smooth out your budget. This is why finding a wedding loan provider with flexible repayment options is an important consideration when comparing personal loans for your wedding.
Bonus
Keeping on top of your loan repayments might actually go towards helping you build your credit rating. This can be a handy side effect of taking out an unsecured personal loan for your wedding, particularly if you and your life partner are looking to buy a home together after you’re married.
Cons of getting an Unsecured Personal Loan for your wedding
Interest rates & fees
Every personal loan comes with an interest rate that you pay on top of the loan principal, meaning that you end up repaying more than what your wedding costs in total. Also, when you are comparing loans, be sure to pay attention to the different type of fees that might be charged, such as a loan establishment fee, a monthly account keeping fees, early exit fees or early repayment fees and late payment fees.
Keep in mind
Using a comparison rate will let you compare personal loan products including any ongoing fees; however they usually only provide an indicative interest rate based on applicants with excellent credit history. The comparison rate that is advertised many not cater to people with a less desirable credit history.
Loan options
Most personal loans come with a maximum and minimum loan amount. If you need a significant loan, you may find that lenders cannot lend you the full loan amount. Also, care should be taken when you compare personal loans as you might be restricted in your options as to whether you can opt for a variable rate or fixed interest rate. Fixed rate loans have the benefit of locking in your monthly repayments.
Wedding loans are Unsecured Personal Loans
If you’ve had a car loan before, you’re probably aware that they are a secured loan, which means the car acts as security for the lender, and in these circumstances, you’re usually offered a more attractive interest rate than the rate offered on unsecured loans. A loan for a wedding is an unsecured loan, which means that your loan options, loan terms and interest rates may be different to what you’re used to.
At Finance One, we are happy to provide a personalised rate estimate, so you know what interest rate and loan terms would be available given your personal circumstances.
Apply Online NowImpact on your credit report
How to access a wedding loan when you have a bad credit score
If you’re concerned about how your credit scores might affect your chance of getting a loan for your wedding, rest assure that at Finance One, we work with many Aussies who have poor credit. We believe that your current bank statements give a much clearer picture of your financial situation rather than your credit reports.
