Quick Guide to Finance a Wedding with a Personal Loan

A wedding is an event that marks the beginning of an entirely new chapter in our life. If you are due to get married soon, then either you must have planned your finances or you are about to start planning to fund your wedding. The average cost of a wedding in the UK was £31,974 in 2019 according to hitched.co.uk. And most of the couples were depended on their families to stump up some money to finance the wedding. Some couples work hard and stretch themselves to arrange money for their dream wedding. However, some couples also take out a wedding loan to cover the shortfall in their finances.

We will explain how a personal loan for a wedding works and what are the benefits of using a loan for getting hitched in this quick guide.

What is a wedding loan?

A wedding loan is a personal loan that can be borrowed to pay for your wedding expenses. You can borrow money and repay it over several months or even years in fixed monthly instalments. An interest rate will be set by the lender on the amount that you borrow. So, you have to pay back the money that you have borrowed along with a fee that will be charged as interest on the loan that you are taking out.

These are collateral-free loans, hence, you do not have to provide any collateral to secure a wedding loan. As there is no collateral involved, the rate of interest levied on these loans are higher as compared to secured loans.

If you fail to repay the loan, the lender doesn’t have the right to repossess your property or any other asset to recover the money you owe to them. However, failure to repay the loan may lead a lender to take legal help. You may be issued with a County Court Judgement (CCJ), which will impact your credit score and your future borrowing experience. A CCJ stays on your credit report for 6 years. Therefore, prepare a repayment plan before you borrow a loan to steer clear of the potential complications that may crop up.

What are the benefits of using a wedding loan?

If you use a wedding loan with careful planning, you will gain a lot of benefits. Listed below are some of the advantages of using a wedding loan.

Easy to apply

Wedding loans are personal loans that are easy to apply. The brick-and-mortar lenders have shifted their businesses online. You can visit their website and apply for a loan. The lenders will assess your profile and give their decision.

No collateral required

You do not have to put your home or any other asset at stake for availing a wedding loan. So, even if you fail to repay the loan, the lender cannot repossess your property to recover the money. However, failing to repay the loan will lead to other financial consequences, for example, you may receive a County Court Judgement, which will damage your credit score.

Repay in instalments

Unlike credit cards, you do not have to repay the loan in a single shot. You can choose a repayment period according to your monthly income and outgoings. Wedding loans are instalment loans, so the repayments can be spread across several months. If you prepare a budget, it will be easier for you to manage your finances.

How to apply for a wedding loan?

Loan Princess is a broker and not a lender. We have some of the UK’s reputed lenders on our board. Fill up a single and straight forward application form with all the necessary details. The lenders may want to know about your employment status, how much you earn each month, your monthly outgoings, residential address and also if you have any other debts that are you are paying off currently.

Once you fill the application form, submit it online. Your application will be assessed by the lenders along with your credit score. Then the list of lenders who are willing to lend a loan to you will be displayed on your screen with the interest rates they will propose.

Choose the offer that you find suitable according to your financial circumstances. Remember, if you have a good credit score, you will be offered loans with low-interest rates. However, a bad credit score will always attract high-interest rate loans. Review your credit report before applying for a loan and check for any errors. If you spot an error, report it to any of the 3 Credit Reference Agencies to get it updated.

Plan ahead of taking out a loan to streamline your income and budget so that you stay on the track.