A wedding is a time that knows no season or waits for the right moment. Many people even start saving and preparing for their D-day a year in advance! However, a few need financial help from the institutions to make their dreams come true.
It is not wrong to take a wedding loan from financial institutions. A wedding loan is just like any other mortgage or personal loan people take. It has similar criteria as any other loans that you need to meet. The lender, bank or credit unions check your credit score and income to debt ratio to decide the eligibility.
The term for these loans is 5 years and, in some cases, exceeds up to 12 years as well. Your credit score also influences the interest rates ranging between 5% to 35%. Let the right financial advisor help you plan your finances well. Use GetEmail.io to find the best suited professional you need. It also comes with a chrome extension to a Linkedin account that finds people's email addresses within minutes!
The prerequisites
Before applying for the wedding loan, ensure that you're prepared for what comes after. Make a list of all the expenses you need help with - like, the photographer, the wedding dress, venue, catering, etc.
Don't apply for more than what you need because you will have to pay installments with interest which will take a couple of years to finish. Certain vendors ask for a percentage of the whole expense as the down payment. Apply for loans to take care of such payments.
Refer pros and cons
Every aspect of our life comes with some pros and cons. We have to weigh them appropriately and decide what's best for us. The same goes with financing the wedding too. Here are some pros and cons to consider,
Pros:
- The processing is quicker than compared to any other means.
- Unlike home and auto loans, wedding loans don't take collateral as leverage. Instead, they check your income documents for eligibility.
- The interest rates are comparatively lesser than personal loans.
Cons:
- The more amount you request, the higher the chances of you overspending your budget.
- If you don't manage the expenses within the budget then the loan becomes an added burden that stretches you thin.
- A longer term with a lesser amount seems like a great plan initially but, if you do the math, you'd know that it is, in fact, costlier to do so.
The alternatives
Wedding loans aren't the only ones that you need to apply for. Search for alternatives like cash on the credit card, personal loans, etc. Though many people assume that loans on credit cards are costlier, you can avail of 0% APR for the initial year.
Apart from this, last-minute help, it is advisable to save money beforehand and spend less. The more you save, the less likely you will need a loan for your wedding day. However, if you have no time to save, then cut down on your expenses to a minimum. That way, you will be able to handle as much wedding cost as possible.