Everything to Know About Wedding Financing

If you're like many people, your wedding is one of the biggest days of your life! It's only natural to want an exciting celebration with your friends and family members, complete with all the bells and whistles like a giant cake, a beautiful bridal dress, and an ensemble band for the reception. At the same time, weddings tend to be some of the largest single-day expenditures for many Americans.

Indeed, financing a wedding can be a significant hassle, even if you save up ahead of the wedding date and get a little help from parents. Fortunately, you don’t have to pay for a wedding with just the money in your pocket. Wedding financing solutions like personal loans can make the cost of your big day much more manageable. Let’s explore wedding loans and other financing options to help you enjoy the wedding of your dreams!

Average cost of a wedding

Before you take out a loan to pay for your wedding, it’s a good idea to know how much money you need to borrow!

As of 2023, the average cost of a wedding nationwide is $35,000: about $5,000 more compared to the average for 2022. The increase in cost is primarily due to inflation, but it’s also just because plenty of couples want to pull out all the stops for a top-notch celebration!

You might wonder where all that money goes. Remember, you don’t just pay for your marriage license and the rings. The total cost of a wedding comes from a combination of factors, like: 

• Booking the reception venue – $12,800
• Hiring a wedding photographer – $2,900
• Hiring a live wedding band – $4,300
• Fitting and purchasing a wedding dress – $2,000
• Ordering a delicious wedding cake – $540
• Catering – about $85 per person
• Sending out wedding invitations – $530 

Can you finance a wedding with personal loans?

If you don't have tens of thousands of dollars saved up ahead of time but also don't want to elope or opt for a very tightly budgeted wedding, you're in luck: you can indeed finance a wedding with personal loans.

A personal loan with a good interest rate and reasonable loan terms could help you pay for everything you need to make sure your wedding goes off without a hitch. With a personal wedding loan, you can:

• Get all the money you need to pay for immediate purchases and expenses
• Pay back the total cost of the wedding over time with regular monthly payments

Just like it’s common to buy a car with a loan, paying for your wedding with a loan relieves you of immediate financial pressure and still empowers you to celebrate just like you always dreamed.

How much can you borrow?

In theory, you can borrow as much money as you need for your upcoming wedding – so long as you can find the right lender, that is.

Most wedding loans are unsecured, meaning they aren’t borrowed against collateral. You’ll usually find wedding loans ranging from $1,000 – $10,000 based on things like your lender, your pre-existing relationship with the lender, your credit score, and more.

Just remember that however much you borrow now is money you must pay back later. Because of this, you should make your wedding planning checklist thoughtfully, then try to take out a loan for a little more money than you project in case you run into unexpected expenses (like having to book a different photographer at the last minute). 

That way you’ll give yourself some financial wiggle room. If you end up not needing the extra cash from a larger-than-necessary wedding loan, you can put that money directly toward the balance to minimize the remaining principal.

What can you use a wedding loan for?

Wedding loans are simply personal loans like any other. Therefore, you won’t be limited by how you can use the money. Once you take out a wedding loan, you can spend it on anything you need financial help with, such as:

• Hiring an excellent caterer
• Paying for your wedding invitations
• Shopping around for the perfect dress
• And more

The freedom and flexibility of personal loans are good examples of why it's such a stellar financial solution for couples who want to have a fantastic time at their wedding.

Qualifying for a wedding loan

The right wedding loan can make financing your big day much less of a hassle and allow you to enjoy the festivities without worrying about penny-pinching. But the best wedding loans, just like other top loan offers, do have some qualification requirements.

Since most wedding loans are unsecured, they might have higher qualification benchmarks compared to secured auto loans and similar instruments. For instance, you’ll likely need to have:

• Proof of consistent income and a relatively low debt-to-income (DTI) ratio. In other words, you shouldn’t have a lot of other outstanding debt when you apply for a new wedding loan.
• A decent credit score. The better your credit score, the better loans you will qualify for. Generally, unsecuredpersonal loans are available for those with credit scores of 640 or above. Your credit score will also affect the interest rate you can expect for your wedding loan.

Depending on your credit score in the loan you qualify for, your interest rate may range from anywhere as low as 6% to 36% or more. Since a lower interest rate is always better, it’s a wise idea to pre-qualify with several lenders so you can select the best possible option before signing on the dotted line.

Can’t qualify for the loan of your dreams for the day of your dreams just yet? You might still have time to get your financial ducks in a row before your wedding! Some of the savviest ways to boost your credit profile before applying for a loan include:

• Consolidate your debts with a debt consolidation loan, then pay the collective total off over time
• Pay off any smaller debts completely before moving on to larger loans/lines of credit
• Don’t open up new lines of credit or take out new loans just before applying for your wedding loan
• Make sure to make all of your recurring bill and loan payments on time 

Other ways to finance a wedding

While a wedding personal loan could be an excellent tool to help you finance a fantastic wedding celebration, there are other tools you can use, too! Let’s take a closer look.

HELOCs

A home equity line of credit, or “HELOC,” is a credit line you get by borrowing against the equity on your house.

With a line of credit, you can access a revolving credit line to draw against for big purchases, like wedding expenditures. You can spend money up to your credit limit, and anytime you draw against the credit line, you need to make regular monthly payments to bring it back down.

With a HELOC, your home’s equity acts as collateral for the line of credit. Since the HELOC has collateral, this financial option usually comes with lower interest rates than other credit lines.

Say you have $50,000 of equity built up in your property. You contact a lender and take out a HELOC for $30,000, drawing against the equity. So long as you make monthly payments on time, your equity will be secure, and you'll have the financial freedom you need to finance your wedding for maximum fun.

Credit cards

Don't discount the ease of use of traditional credit cards, either! With the right financial partner, like a federal credit union, you can apply for a new credit card with an excellent APR and a high credit limit, perfect for financing a wedding.

Just like a line of credit, the cards give you a certain amount of credit to draw from. Then, you just pay down the credit whenever you maintain a balance on the account.

Credit cards can be a wise means to finance a wedding since you only have to pay back the money you actually use. Unlike with a loan, if you take out a credit card with a limit of $10,000 but only use $5,000, you only have to pay back $5,000 plus interest.

Enjoy your big day

Weddings might be expensive, but they can be more affordable with financing. Credit cards, wedding loans, and lines of credit are all excellent ways to lighten the load on your wallet without having to compromise on your big day. Think about your budget, your projected costs, and your credit score – then pick the right financing solution and have a fantastic wedding!