Getting a Wedding Financed with Unsecured Loans

Budget for Weddings, Costs and how to get Loans

Nov 11, 2009

Despite budgeting, costs often escalate, potentially making for an expensive wedding. Getting a small unsecured loan may help when it comes to planning for hidden extras.

Marriage partners do not want to start off their lives together heavily in debt. However, unless the wedding is something that has been saved for or parents are paying, the wedding may need to be financed.

Wedding Costs

Even without being extravagant, costs tend to mount up beyond what is budgeted for in terms of costs for florists, venue hire stationary, photographers, clothes and food to make that perfect wedding.

According to Wedding Cost Estimator Sharon Naylor, the average US wedding will cost in the region of $20,000. This price tag does not include extras such as honeymoon trips and accessories, rings, engagement parties and bridal showers.

Wedding Finance with an Unsecured Loan

For unsecured borrowers, it is important that they know their credit score. This gives the borrower the power to correct rates if applicable and potentially get an unsecured loan with a better interest rate, making the loan a cheaper one to repay.

FICO scores range from 300-850. A credit score above 720 is considered good credit score while below 600 will be labeled as bad credit. Grades are given in approximation credit scores. The grades range form A to E. A bad credit rate will have C, D and E credit grades.

How Much can be Borrowed for a Wedding?

The amount that lenders offer for unsecured credit loans varies and depends on the lenders. Typically they will be lower amounts than what can be obtained if there is collateral.

The amounts vary between $500 to as high as $30,000 and the amount depends on the person's monthly income and ability to repay. The payments are usually made monthly and the repayment period can be anywhere between 6 months to 10 years.

If the bride or groom has extra cash, he or she can pay off the loan or pay in a lump sum, but it is important to remember that lenders will penalize the borrower if the loan is paid up early.

Lenders will often agree to allow borrowers to take a “payment vacation” over holidays to allow the borrower a break during holiday season but typically interest will still be charged on the outstanding balance.

Before signing any contract, always check terms and conditions carefully and never sign without fully understanding what is involved in taking out an unsecured loan.

Getting an Unsecured Loan for a Wedding:

Try approaching friends, family or colleagues: Obviously this is the best option, as they may be kind enough not to charge interest. However, make sure a signed contract is in place that all parties are satisfied with. Compare online for the best deal or approach a lender where there is an existing relationship to negotiate good repayment rates.

No matter how desperate a couple may be to get a personal loan to finance their wedding, be very careful of fake lenders, scam artists and loan sharks. Keep up to date with the latest scam techniques making the rounds.

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