The average cost of a wedding in 2021 was $28,000, according to The Knot. Since weddings are so expensive, many people turn to personal loans to help bring their special day to life.
While a personal loan isn’t always the best option when it comes to paying for wedding expenses, wedding loans can come in handy if you find yourself in a financial pinch and need some extra funds to cover costs. If you’re considering taking out a wedding loan, make sure to compare multiple lenders and choose the shortest repayment term you can afford to save on interest costs.
Here’s everything you need to know about wedding loans as well as some tips for how to save money on your celebration:
- What is a wedding loan?
- How do these personal loans work?
- Lenders to consider for wedding loans
- Pros, cons of borrowing for your wedding
- How borrowing will impact your credit score
- Wedding costs to consider
- How to apply for a personal loan
- Wedding loan alternatives
What is a wedding loan?
A wedding loan is a personal loan you can use to cover a variety of wedding expenses. It’s typically unsecured, meaning you don’t have to put up an asset, like a house or car, as collateral.
You can use a wedding loan to cover a variety of costs associated with your big day, from engagement rings and wedding gowns to venues and catering. Some lenders will even allow you to use your wedding loan to pay for your honeymoon.
While every lender has its own unique requirements, most will consider your credit score to determine whether to approve your application, as well as your interest rate and loan amount.
How do wedding loans work?
To get a wedding loan, you’ll apply for a personal loan from an online lender, bank, or credit union. The lender will then evaluate your credit history and other aspects of your financial profile, such as your debt-to-income (DTI) ratio and employment status, to determine if you qualify for a loan.
Once you get approved for a wedding loan, you’ll receive a lump sum of money, usually via direct deposit. Then, you’ll repay what you borrow plus interest and any applicable fees over a period of anywhere from one to seven years.
When selecting a loan repayment term, it’s wise to go with the shortest term you can afford. This will help you save on interest costs over time. While a longer term means smaller monthly payments, it also comes with more interest charges over the life of your loan.
If you apply for a wedding loan with an online lender, you may be able to get your funds as soon as the same day you apply, within 24 hours, or in a few business days. If you opt to get a wedding loan through a traditional bank or credit union, you can expect to get your funds within a week.
When should you get a wedding loan?
There are a number of situations when it might make sense to get a wedding loan. You might want to go this route if:
- You need to borrow money for your big day and can lock in an affordable interest rate and favorable repayment term.
- You have a stable income and can afford to repay the loan in the shortest amount of time possible.
- You have enough room in your budget to cover the monthly payment and pay off your loan on time.
How much can you borrow for a wedding?
Personal loans typically range from a few hundred dollars to as high as $100,000. But the amount you can borrow for a wedding will depend on factors like your credit score, income, and employment status.
Lenders to consider for wedding loans
The following four Credible partner lenders offer wedding loans with some great perks:
Avant: Our favorite for borrowers with poor or fair credit
Avant is an online lender that strives to improve the borrowing experience for the middle class. The lender has provided funding to more than 2 million borrowers. Avant’s personal loans are accessible to borrowers with lower credit scores and, if approved, funds can be deposited into your account as quickly as the next business day.
Avant might be a solid choice if you need to cover a small expense, with loan amounts that start at $2,000 in most states. You can also manage your loan using Avant’s mobile app. However, Avant charges fees, and it may not be available in your state.
- Interest rates: 9.95% to 35.99%; fixed
- Loan amounts: $2,000 to $35,000; minimum of $6,400 in Massachusetts
- Loan terms: 1 to 5 years
- Minimum credit score: 580
- Loan types: Emergency, debt consolidation, medical, home improvement; secured and unsecured
- Funding time: As soon as the next business day after approval
- Eligibility: Must be at least 18 years old (19 if you live in Alabama); must have a personal bank or credit union account; must be able to provide proof of income and identity; must not live in HI, MA, ME, NY, VT, or WV; must have a monthly income of at least $1,200
- Fees: Administration fee of up to 4.75%; late fee of $25; returned payment fee of $15
- Cosigner acceptance: No
- BBB rating: A
Pros:
- Fast funding
- Wide range of repayment terms
- No prepayment penalties
- Convenient mobile app
Cons:
- Charges an administration fee
- Low maximum loan amount
- Not available in all states
- Doesn’t accept cosigners
- Doesn’t disclose many eligibility requirements on website
- Doesn’t offer discounts
LightStream: Our favorite for fast funding
LightStream is an online platform that offers loans to individuals with good-to-excellent credit profiles. Unlike some lenders, LightStream offers benefits like an autopay discount. When you sign up for automatic payments prior to loan funding, you can qualify for a 0.50 percentage point discount on your interest rates.
In addition, LightStream has a convenient mobile app that makes it easy to check your loan balance and make payments. However, the lender has a high minimum loan amount, so if you only need a small loan, you’ll need to look elsewhere.
- Interest rates: 7.49% to 24.49% (with autopay); fixed
- Loan amounts: $5,000 to $100,000
- Loan terms: 2 to 12 years
- Minimum credit score: Does not disclose
- Loan types: Home improvement, debt consolidation, medical expenses, weddings, auto loans, and more; unsecured
- Funding time: As soon as the same day
- Eligibility: Must have good credit; must have sufficient income to support your existing debts and loan amount; must have a valid Visa or Mastercard
- Fees: None
- Cosigner acceptance: No; co-borrowers accepted
- BBB rating: A+
Pros:
- Fast funding
- High maximum loan amount
- Long repayment terms
- No fees
Cons:
- Only approves borrowers with good-to-excellent credit
- High minimum loan amount
- Doesn’t disclose many eligibility requirements
- Must have a Visa or Mastercard
PenFed Credit Union: Our favorite for small loan amounts
Because PenFed is a nonprofit credit union, it’s able to offer lower interest rates than some lenders.
You don’t need to be a member to apply for a loan at PenFed. However, once you decide to go ahead with a loan, you’ll need to become a member. This is a simple process that only takes a few minutes.
PenFed can be a great option if you need a small loan, since its minimum loan amount is just $600. However, the lender doesn’t disclose many of its eligibility requirements online, which can make it difficult to determine if you’ll qualify for a loan before applying.
- Interest rates: 7.74% to 17.99%; fixed
- Loan amounts: $600 minimum to $50,000
- Loan terms: 1 to 5 years
- Minimum credit score: Does not disclose
- Loan types: Debt consolidation, home improvement, transportation, medical and dental expenses, weddings, and more; unsecured
- Funding time: 1 to 7 business days
- Eligibility: Must provide proof of income; must have a Social Security card, utility bill, passport, or copy of a valid government-issued ID for proof of identity
- Fees: Late fee of $29; no origination fees or prepayment penalties
- Cosigner acceptance: No; co-borrowers accepted
- BBB rating: A+
Pros:
- Competitive interest rates
- Small minimum loan amount
- No origination fees or prepayment penalties
- Accepts co-borrowers
Cons:
- Must be a member to receive loan funds
- Doesn’t disclose many eligibility requirements
- Charges late fees
SoFi: Our favorite for no fees
SoFi offers personal loans up to $100,000, making it a worthwhile option for borrowers who need large loan amounts for home improvement projects, wedding costs, or other needs. SoFi can also fund your loan the same day you’re approved.
SoFi’s website states that you can check your rate online in just 60 seconds, with no impact on your credit score. And you don’t have to worry about how you’ll repay your loan if you’re laid off; if you’re approved for SoFi’s Unemployment Protection, the lender will modify your payments for up to 12 months and will help you find a new job, too.
- Interest rates: 8.99% to 25.81%; fixed
- Loan amounts: $5,000 to $100,000
- Loan terms: 2 to 7 years
- Minimum credit score: Does not disclose
- Loan types: Credit card consolidation, home improvement, wedding, relocation, vacation, medical expenses; unsecured
- Funding time: As soon as the same day you sign your loan agreement
- Eligibility: Must be at least 18 years old (or age of majority in your state); must be a U.S. citizen, eligible permanent resident, or non-permanent resident alien; must reside in a state where SoFi is authorized to lend; must be employed, have sufficient income from other sources, or have an offer of employment to start within the next 90 days
- Fees: None
- Cosigner acceptance: No; co-borrowers accepted
- BBB rating: A+ (not BBB-accredited)
Pros:
- Large loan amounts
- Fast funding
- No fees
Cons:
- High minimum loan amount
- Doesn’t disclose minimum credit score
- Doesn’t accept cosigners
Methodology
Credible evaluated loan and lender data points in eight categories to identify the “best companies” for personal loans. We looked at interest rates, repayment terms, repayment options, fees, discounts, and customer service availability offered by 21 lenders. We also considered each company’s max loan amount, how long it takes to receive funds, whether the minimum credit score is available publicly, and whether consumers could request rates with a soft credit check. Credible receives compensation from its lender partners when a user of the Credible platform closes a loan with the lender.
Pros and cons of wedding loans
Just like all financial products, wedding loans come with benefits and drawbacks, including:
Pros
- Fast funding: You won’t have to wait weeks or months to get your money. Many lenders will fund wedding loans the same or next business day after approval.
- Lower interest rates than credit cards: Personal loans typically come with lower interest rates than credit cards. In November 2022, the average APR for a credit card was 20.40%, while the average rate for a two-year personal loan was 11.23%, according to the Federal Reserve. A lower rate can save you hundreds or even thousands of dollars on your wedding.
- Flexible repayment terms: Most online lenders offer loan terms ranging from one to seven years. While a longer term can help minimize your monthly payments, you’ll pay more interest overall. Generally, it’s a good idea to go with the shortest repayment term you can comfortably afford.
Cons
- Less options for bad credit: If you don’t have the best credit, your options for wedding loans will be limited. And if you do get approved for a loan, you’ll likely have to settle for a higher interest rate. Consider applying with a cosigner with good credit to increase your chances of getting approved. Just keep in mind that if you can’t keep up with payments, your cosigner will be responsible for repaying your loan.
- May come with fees: Depending on the lender, you may be on the hook for fees in addition to interest. This can include origination fees that are deducted from your total loan amount, late payment fees, and prepayment penalties for paying off your loan early.
- Can cause you to overspend: Some lenders offer personal loans as high as $100,000. If you’re approved for a large loan, you may be tempted to go overboard and spend more on your wedding than you need to.
How a wedding loan will impact your credit score
A wedding loan can help improve your credit score as long as you make your payments on time each month. Your payment history makes up about 35% of your credit score, so it’s important to determine if you’ll be able to keep up with payments before you take out a loan. You can use a personal loan calculator to estimate your monthly payments and find a loan that fits within your budget.
On the other hand, when you apply for a personal loan, the lender will perform a hard credit check. This can cause your score to temporarily drop a few points, but your credit will likely bounce back in just a few months. Missed or late payments can also bring down your credit score, making it important to only borrow what you can comfortably afford.
Wedding costs to consider
As you plan your wedding and explore wedding loans, consider all the costs. Here are the average prices for some typical wedding features:
- Reception venue: $10,700
- Planner: $1,700
- Photographer: $2,500
- Videographer: $1,900
- DJ: $1,400
- Live band: $4,300
- Invitations: $530
- Florist: $2,300
- Wedding cake: $500
- Wedding dress: $1,800
- Tuxedo: $200 to rent, $500 to $1,000 to buy
- Catering: $75 per person
- Transportation: $900
- Engagement ring: $6,000
How to apply for a wedding loan
To apply for a wedding loan, follow these four steps:
- Compare lenders. Not all wedding loans are created equal. Shop around and compare at least three lenders. Consider interest rates, terms, and fees so you can hone in on the right loan for your unique situation.
- Pick a loan option. Once you’ve compared multiple lenders, it’s time to pick a loan. Choose a loan with the lowest interest rate and shortest repayment term you can afford, and select a reputable lender with good ratings and reviews.
- Complete the application. Fill out the application online or in person. Be prepared to share basic personal and financial details. You’ll also likely need to provide documentation, such as recent pay stubs or tax returns.
- Get your funds. Upon approval, the lender will distribute your funds. Typically, they’ll release your funds via direct deposit, check, or prepaid card.
Wedding loan alternatives
If you decide wedding loans aren’t right for you, consider these alternatives:
- High-yield savings account: With a high-yield savings account, you can earn more interest on your savings. By placing your money in this type of account, you can grow your savings faster and put that money toward your wedding.
- 0% APR credit cards: A credit card differs from a loan in that you can borrow money as you need to, up to your set credit limit. Consider credit cards with a 0% APR introductory period so you can avoid paying interest during that time. Many cards offer an introductory period of 12 to 15 months. Just keep in mind that if you can’t pay off your card before the introductory period ends, your card’s regular APR will kick in and apply to your remaining balance.
- Plan a modest wedding to save money: Get creative with cutting wedding costs. Some ways to do this include hosting a wedding on a Friday or Sunday instead of Saturday, making your own centerpieces and flower arrangements, buying a used dress, and limiting your guest list.