Planning your wedding is exciting, at least until you find out what your big day will cost. The average wedding cost in 2014 was over $30,000, according to The Knot. With increasing costs, more people are looking to wedding loans to help finance there big day, using personal or signature loans. Depending on the scope of your ceremony, it may be possible for more than one person to take out a wedding loan to cover costs. Here's what you need to know about personal loans, which include wedding financing.

Wedding Loan Options: Personal Loan or Personal Line of Credit

Lenders may offer personal loans, which are approved for a specific amount and have a set repayment schedule, or you may prefer a personal line of credit which has an assigned credit limit that you can draw against as needed. Personal lines of credit may carry adjustable rates as they are used over time instead of a finite loan repayment term. A wedding loan provides an amount of cash; if you need more than you've borrowed you may need to use additional financing to meet the costs of tying the knot.

Using a personal line of credit as a wedding loan allows you to pay for expenses as you go up to your maximum credit line. You're charged interest only on amounts drawn against your personal line of credit.

Consumer Financial Protection Bureau advises consumers to shop and compare personal loans or lines of credit rates and fees associated with each prospective loan. 

Wedding Loans: What You Need to Know

  • Personal loans are unsecured loans, which means that you won't have to put up collateral such as your car or home.
  • Interest rates on unsecured personal loans may be lower than credit card rates or "hard money" loans, and you won't risk losing collateral if you encounter financial problems and can't make your payments on time.
  • Borrowing money can offer a convenient source of funds that shelling out cash doesn't offer. It may be easier to overspend when you're spending borrowed money, but problems can arise when payments are due. Before borrowing money for your wedding, it's important to have a budget in place based on price quotes for the goods and services you'll need.

The Federal Trade Commission recommends shopping for goods and services as well as loans you'll need. Shop for your best deal on a wedding loan. Taking time to shop and compare loan rates and terms can help you save and avoid unpleasant surprises and regret.

Things to Keep in Mind

Your credit scores can impact how much a wedding loan will cost. Check your credit scores before you start planning for an extravagant wedding.

While couples typically want a "perfect" wedding, it's important to be realistic about what you can afford. Starting a marriage with huge wedding debt can turn tying the knot into a financial burden that impacts your lives for years to come. 

Establish priorities: A lavish wedding may be your dream, but what else is important to you? Buying a home? Do you need another vehicle for commuting to work from the suburbs? What about saving for your kids' college? Weighing priorities against your wedding plans can help with setting your wedding budget and determining a realistic amount for your wedding loan.

Big or small your wedding is a major milestone. You can start shopping for your wedding loan by comparing personal loan rates from our network of lenders.

Frequently Asked Questions