Let us begin this article with a hearty congratulation!
Chances are that if you are here with us, you might be considering getting married in the next few days, weeks, or months. We do not need to tell you this, but in 2023, weddings have become expensive!
From the best caterers to the whitest lilies to adorn the reception venue, weddings have become an expensive proposition. This is why one of the foremost discussions that would-be-married couples have centered around the finances for the big day.
In this article, we discuss how wedding loans work. Additionally, we will discuss the five major pros and cons of wedding loans.
Wedding Loans: Meaning and Definition
In very simple words, a wedding loan works exactly in the same way as a personal loan. You can borrow literally any sum of money from $10000 to $50000 and opt for a flexible payment schedule over six months to ten years.
Like a personal loan, you would not have to give a lot of documentation or offer collateral when getting the loan. All you need to do would be to submit proof of income, your credit score, and brief documentation.
When it comes to wedding loans, the rates of interest are very similar to that of personal loans. Some banks might offer lower rates of interest during the wedding season, whereas others may opt for partially higher rates.
Many couples who are looking to get married prefer wedding loans to credit cards. The simple reason is that credit card rates of interest are much higher as compared to wedding loans.
If you wish to know more about wedding loans, please check out https://ukcredit.sg/wedding-loan/
5 Major Pros of Getting Wedding Loans
- One of the major benefits of wedding loans is that you will always be able to spend to your heart’s content. We earn all our lives but get married only once. A wedding loan can help you fulfill a gala wedding ceremony that you have always wanted.
- Secondly, the actual time of processing a wedding loan might be as low as 24 hours. You apply online, submit scanned copies of your documents, get a call from the bank and voila, you have the money in your bank account.
- Thirdly, you save a lot of interest as compared to credit cards. Many couples make the mistake of maxing out their credit cards, only to realize the burden of interest rates once the honeymoon period is over.
- Fourthly, a lot of wedding loans do not ask you to pay foreclosure charges. Smart couples estimate the kind of monetary gifts that are likely to receive and close the wedding loan within a few months. You do all this without any extra charges.
- Finally, repaying a wedding loan allows you an opportunity to improve your credit score. As a couple, you might have plans to get a new home or buy a new car. When you have a good credit score, you can get a loan for the same without any hassles.
5 Major Cons of Getting Wedding Loans
- Firstly, you need to understand that you will be starting with your married life in debt. This means that you will already have a financial burden on top of your head when you start your new life. This can cause some strife in your married life.
- Secondly, getting a wedding loan can impair your ability to get loans for anything else after you get married. This means that banks will be careful of lending your money for a new car or a home when you have an additional loan repayment already going on.
- Thirdly, getting a wedding loan may trick you into spending a lot more than you had initially planned for the same. This can go to disproportionate lengths where you realize that you have extended the wedding budget 3x or even 3x times.
- Fourthly, no matter how low the rate of interest is, you will have to end up paying the same. Even if the rate of interest is 10%, for a $20000 loan, you will have a final payment amount of $25000. This is $5000 extra over what you have borrowed.
- Lastly, if others in your family or friend circle get to know about the same, your social capital will stand eroded. People would then say that you should have held a wedding that you could afford, rather than taking a loan for the same.
Are there any Good Alternatives to Wedding Loans in the Market right now?
While there is no doubt that a lot of people prefer wedding loans, there are some that feel that there might be other more credible alternatives in the market. Let us look at some of them below-
Taking Help from Family and Friends-
If you have already thought about borrowing money, you might want to do it from someone to whom you do not have to pay interest. This means you can always go to your parents and ask them for a small loan. Or, you can appeal to your friend circle to help you with some extra cash. This will ensure that you are not under pressure or have to pay interest rates.
Using 0% Credit Card Purchases-
Several banks offer credit cards with zero interest purchases. If you feel that you would be falling short of money, you can apply for this credit card. While the amount will be something that will be less as compared to a wedding loan, you will be able to make payments of up to USD 2500.
Taking an Advance on your Monthly Salary-
One area where a lot of people should consider is requesting the employer for an advance on your monthly salary. If you are on good terms with the employer, they will be more than happy to help out a hard-working employee. While you might get reduced salaries for the next few months, you will at least not have additional interest rates to pay off.
The Bottom Line
In this article, we have looked at some of the basics of wedding loans. We have discussed the major pros and cons and tried to help you make a concrete decision going forward. If you have any other questions, you would like us to answer, let us know in the comments section below.