Weddings are often costly, but the significance of this landmark in life is immeasurable. That’s why many couples make huge investments to mark the momentous occasion. Many factors such as location, number of guests, and individual preferences contribute to the hefty cost of a wedding. However, venues usually eat up a significant portion of the budget averaging Rs. 70,000. When you add other small expenses like the photographer’s expense and wedding dresses, the cost can be very high.
For couples looking to amass the necessary funds for their dream wedding, taking a loan is a viable option. Commonly referred to as “wedding loans,” they are personal loans that can be availed instantly. By applying for this type of loan, you can cover your costs without breaking the bank, making it easier for you and your partner to achieve wedded bliss.
Before securing a personal loan for a wedding, it is essential to understand some of the things involving wedding loans. You should familiarize yourself with any potential risks of taking out such a loan and ensure you understand all terms included.
What’s a Wedding Loan?
Wedding loans are not just one type of loan. You don’t just go to a bank and apply for a wedding loan the way you would with a mortgage loan, but some banks offer “wedding loans.” These usually come in the form of unsecured personal loans that can be used to cater for wedding expenses.
As more online lending options become available, wedding loans are the go-to option for those planning to hold a wedding. These are the types of loans to help you get instant cash loan in 1 hour to cover wedding-related expenses. The loan can help cover any expense involved from flowers and cakes to honeymoons or venue hire fees.
Depending on where you get the funds, a wedding loan can be a great idea or a last resort for your big day. If you’re considering this route, here are some key points to consider:
- A Quick Way of Getting Money
Availing of a personal loan is now easier than ever, especially if your credit history is good and you have a steady income. Even when your credit history isn’t very good, you may still be able to secure the loan. However, it will likely come at a higher interest rate than those approved with good credit.
Credit-monitoring apps and accounts are a great way to stay informed of pre-approved offers or loans you would be eligible for based on your account information. Additionally, banks can provide numerous loan options accessible to you.
You may be eligible to obtain a secured personal loan with a Certificate of Deposit, savings account, or property such as a home in your possession. A secured personal loan allows you to access additional funds without taking money out of your savings or putting your house up for sale. These loans typically have lower interest rates as the risk is comparatively low.
- The Impact on Your Credit Score
When lenders review your loan application, they always evaluate your credit score. This process may require a hard credit inquiry, which can hurt your rating. Consequently, it is critical to be cautious when applying for loans. Too many hard credit checks in a short time will be a red flag to the lender.
- Have a Repayment Plan
Unless you have a very good plan to pay off your loan, do not take out one. Otherwise, the possibility of borrowing too much and getting overwhelmed by monthly payments is high. Devise a repayment plan that fits your budget and allows you to make payments comfortably without pressure.
Identify some areas in the monthly budget and cut them off. You can eliminate the subscriptions, find ways to improve your income or reduce the times you have your meals out. You may also consider spending more hours at your job or starting a side hustle to earn money during weekends and evenings.
- The Loan May Come with Additional Fees
It’s important to remember that personal loans may come with additional fees. Even though the most common fee is origination charges, ensure you look out for prepayment penalties and fees.
If you repay your loan before the term ends, the lender won’t get all the expected interest. When this happens, the lender could levy a penalty based on your principal repayment or remaining interest to recover their losses.
- You are Starting a Marriage in Debt!
When you factor in the debt that both of you have, along with a wedding loan, it can be very difficult to make ends meet as a married couple. This could lead to immense tension and resentment between spouses, which is certainly not healthy for any marriage. To prevent such troubles from affecting your future together, think twice before taking out yet another hefty loan for your big day.
Though a personal loan for wedding can be an excellent way to make your special day memorable, remember you will have another debt on top of your credit card bills. Besides, you should be a responsible borrower and repay it on time. We have highlighted the above key points to assist in making an informed decision about a wedding loan.