Unsecured loans, also called personal loans or signature loans, involve borrowing money without putting up any collateral. LendingTree personal loan offers allow you to shop for the best rates and terms for personal loans up to $35,000.
Financing your wedding may be able to help you afford more in the moment, but it can lead to financial stress down the line. Not only will you have to repay the money you borrowed to afford a great venue or invite more guests, but you’ll also have to repay interest.
Tara Falcone, a certified financial planner and owner of ReisUP LLC, cautions against financing your big day.
“If you cannot afford a luxurious wedding upfront, you’re still not going to be able afford it with a credit card or personal loan,” she says.
Merging finances with your partner “is tricky, anyways,” she says. “The last thing you should do is put a heavy debt burden on the relationship from the get-go.”
Money problems are one of the top three causes for divorce, according to the Institute for Divorce Financial Analysts. (The other two, incompatibility and infidelity). Adding debt to a new marriage could start problems early on. The money you have to allocate toward repaying a wedding loan could make it harder for you to reach other financial goals, like saving up to buy a house, have children or get out of student loan debt.
Lenders will determine your interest rate based on a number of different factors, including your credit history and income.
For a personal loan, having a DTI below 36 percent is considered good, and a good way to improve it is by paying off your debt.
Paying off revolving debt (e.g. credit cards) will also help you improve your credit utilization rate. This number looks at how much credit you have extended to you, versus how much you are actually using. Using a small amount of your available credit can have a positive effect on your credit score, which can help you qualify for lower interest rates when you are borrowing money.
You could also work to improve your DTI and credit utilization by increasing your income and, as a result, pay more toward your debt. Go for that promotion at work. Bring up salary at your annual performance review. Start a side hustle. The more documentable income you bring in, the better. Plus, you can use that extra cash to save for your wedding so you won’t feel like you have to finance it.