You have set a date for your wedding and want to make sure everything goes smoothly. A strategy to factor in every detail becomes a must as there are many expenses for you to account for. The earlier you think of how to finance the wedding, the less stressful it will be as your big day approaches.
This article provides some of the most useful information about wedding loans, including what they can pay for, their benefits and drawbacks, the impact of bad or poor credit, the application process, and credit score implications.
What is a Wedding Loan?
A wedding loan is a convenient way for financing your wedding ahead of time. It is a wedding-related personal loan that helps you pay for your wedding expenses well in advance. This can be done while still arranging the lender’s repayment in fixed amounts and on a set timeline.
What Does a Wedding Loan Cover?
Typically, a wedding loan pays for the ceremony and reception venues, the catering, the wedding gown, the photographer and videographer, the flowers, the wedding rings, and, of course, the reception music. These are the major wedding expenses that can vary from a wedding to another depending on the size, the number of invitees and the overall style and expectations. The wedding loan can also pay for the honeymoon. Therefore, the couple needs to calculate the expenses wisely and only apply for the loan after. They also must ensure that they can repay it comfortably. Alternatively, they should closely reexamine the figures to alleviate any future pressure.
How Do Wedding Loans Affect the Credit Score?
This is the brightest side of the story! Repaying the wedding loan on time would help the couple improve their credit score. This is beneficial if they wish to purchase a house or a car in the nearest future using the loan option.
What are the Advantages of the Wedding Loan?
- The wedding loan can be dealt with as a separate account. As a result, borrowers can keep track of the funds utilized for financing the wedding without getting confused with other regular expenses.
- There is a set time for the loan repayment. In this respect, unlike credit card debts, borrowers have fewer chances of deferring payments, decreasing the possibility of future financial pressure.
- The repayment amounts are fixed. It is easy for borrowers to consider the amount while planning their monthly expenses.
- Couples may have varying financial resources for the wedding. A wedding loan, on the other hand, might be a beneficial instrument for planning ahead of time. It allows borrowers to book the venue at a more convenient period and take advantage of various discounts.
- Just like online payday loans, the prerequisites for wedding loans are simple, handy, and quick. Borrowers can apply for the wedding loan online and get a swift answer in a matter of hours.
- The approval process for a wedding loan is not as complicated as it is for secured credit cards, vehicles, or mortgage loans. Just like personal and payday loans, lenders practice limited background checks. This includes basic information about the applicant’s source of income, address, age (18+), and identity.
Challenges of Getting a Wedding Loan with Poor Credit
- Just like personal and payday loans, wedding loans have relatively high interest rates as compared to traditional installment loans. Those with poor or bad credit history may face even a higher interest rate. Therefore, they need to put more effort while researching loan options.
- Those with poor or bad credit history must be extra cautious. For example, they may get approved for more funds than expected, overspend, and end up with a headache.
- Due to having bad credit history, some lenders will require a form of collateral. However, this is not always the case.
- Deferring the loan installment may lead to the rollover option, as for the personal and payday loans. To put it another way, the loan can be renewed or rolled over into a new loan with/without the remaining interests.
Applying for a Wedding Loan with Bad Credit? Things to Consider
- Work on improving your credit score. The latter plays a major role in your wedding loan application approval, the amount you qualify for and the interest rates.
- Avoid opening a new credit card account, applying for new mortgages, or vehicle loan. They can reduce the average age of the credit history and impact your credit score negatively.
- Do your search online. This helps avoid the hassle of running to lenders’ offices and gives more time for finding the right loan options.
- Look for loans with fixed repayment timetable and manageable payments. This eliminates any future financial burden as you will be committed to pay your debt in small amounts over a set period.
- Think of how to finance your wedding as early as possible. This allows you further flexibility in terms of organizing your wedding and wider range of discount options. As a result, you may be able to reduce your expenses and apply for a lower amount loan.
- Make sure the lender you are considering does not apply prepayment penalties. This will not prevent you from repaying your loan earlier than anticipated.
Bad Credit Loan Options for Wedding Financing
In general, banks, credit unions and standalone financial institutions may provide wedding loans. However, it is difficult for poor credit score holders to get the approval. Thanks to the online lenders’ community! At their convenience, borrowers can do their search, complete the wedding loan application form online and figure out their eligibility maximum during the very next business day. In this respect, they can contact more than a lender at a time and study more options. In fact, applying for the wedding loan online has a higher approval rate than using conventional methods.
By learning about wedding loans, what they can pay for, their advantages and disadvantages, the impact of bad or poor credit, borrowers can think of how to finance their wedding rationally. Keep in mind that the wedding is not an end by itself. It is rather a new beginning with new responsibilities that necessitate budgeting. So, make sure the big day and the days that follow are glitch free! Do not turn your marriage into a bill you cannot afford to pay!
If you wish to apply for a wedding loan online, even with a bad credit score, please contact us. We are here to help you.