The wedding of your dreams can awaken you as a nightmare.
According to The Knot, the average wedding fee in 2016 was $ 35,329, and it did not even include the honeymoon.
Because our community is obsessed with being popular, or because you invite everyone to be your big guest list, you can face huge bills.
Sometimes, those who cannot pay for their weddings apply for wedding personal loans to finance part or all of their big days. But is this an intelligent money movement?
What is a Wedding Loan?
The term wedding loan has become a term that we hear a lot on the Internet. The term means a personal loan to finance a wedding.
Personal loans are commonly used in long-term financing such as credit card debt or training expenses.
When it comes to getting a personal loan, the terms become solid. Generally, you don’t require any collateral, you usually need a high credit score to get from a bank.
You hear the same thing from almost anywhere you are in contact. Getting personal credit for a wedding is not something they can recommend. Most, they advise you to lend personal loans to an accrued expense, such as home renovations.
Instead, financial advisers recommend couples to refrain from buying personal loans for their wedding by reducing their marriage wedding plans or reducing their costs.
Joe Toms, head of the asset management unit at Freedom Financial Network, also proposes to reduce budgeting and costs. However, when these options were exhausted, he said that there were several cases in which personal loans were significant:
Even though cost reduction and careful planning are not enough, a couple opts for a personal loan if they still don’t have enough cash to cover the costs.
When the couple has no other significant debt and the payments can work in the newly wed budget. You don’t want to start your new life together with the payments you can’t make. This may be appropriate if your budget makes room for a monthly payment.
Have you ever looked at the differences between using a personal credit or credit card?
You can see that the average rates in personal loans vary between 14-18% and interest rates in credit cards are between 15-25%. This means that if you go with personal credit, you can save thousands of dollars in the long run.
In addition, personal loans have fixed interest rates and payback periods, so you will never have to face a surprise increase due to the volatility in the market.