Wedding loans are rising in popularity and with the rising costs of getting married, why not? The average wedding in the U.S. costs right around $30,000, which is a huge chunk of money no matter who you are. While wedding loans are offered by dozens of companies around the world, they might not be the best financial decision for a newly married couple. Here are ten reasons you might not want to get that loan.
10. Most Loans Require Security
If you’re taking out a wedding loan then you will most likely have to provide security for it. Whether this is your house, your car, or your possessions is entirely up to you and your lender, but it does put your personal possessions at risk. if you are unable to make a payment, you will lose your security.
9. The Loan Might Have Restrictions
Most wedding loans are unrestricted but some might have restrictions that limit you to spending the money on wedding expenses. Check in advance to make sure that there are no restrictions before you get the loan if you must get one.
8. Your Financial responsibilities Might Make Repaying the Loan Difficult
Chances are that if you are unable to save up the money you need for your wedding then you will be unable to comfortably make payments. If you borrow $30,000 for your wedding on a 10 year plan then you will be paying $250 or $300 a month for the foreseeable future. Ask yourself if you can afford that with any other payments (such as car, house, mortgage, etc.) that you may have. Also consider that if you have kids, your budget will definitely go down.
7. You Have to Pay Interest
Did you know that you can actually end up paying a great deal of interest on your wedding loan? If you get an unsecured wedding loan you could end up paying a huge amount in fees and interest. Most importantly, the longer the payback period, the more you will owe. Consider this before you get the loan.
6. Wedding Loans Last 5-10 Years
Depending on your situation you might think nothing of having to pay on a loan for the next 5-10 years, but what if your situation changes. If you don’t own a house, will you want to purchase one? What happens if you have to buy a new car? There are plenty of reasons that you might not want a debt overhead in the future so you should think it through!
5. You Can Have a Second Wedding Later
Did you know that you can have a simple wedding now for a few thousand dollars and then save up. If you save $250 a month for 10 years, then you can save the $30,000 necessary for your dream wedding without ever paying a cent of interest. While it might seem odd to wait to have your dream wedding, second weddings are popular, and incredibly romantic.
4. What if You Want to Buy a House?
If you want to buy a house then wedding debt might prevent you from doing so. Most homeowners and real estate agents look at the money you owe before approving the purchase. Already owing a great deal of money on your wedding loan will greatly reduce your chances of getting the home you want.
3. Debt is Depressing
Did you know that the leading cause of depression is debt? Racking up that debt in one gloriously romantic bash is going to be even more depressing! Chances are that while you will enjoy your wedding, you might regret going all out on it when you have to pay the bills later.
2. A Wedding Lasts One Day
One of the most important reasons not to get a wedding loan is that no matter how beautiful and special your day is, it only lasts one day. Once that day is over you probably want a fresh start, not a mound of bills to pay off! Consider the long term effects of your loan, and whether or not you really want to start your marriage with a debt.
1. There Are Better Reasons to Get a Loan
No matter what life throws at us, we almost always need money. While your wedding is a great cause, there are better reasons to get a loan. Suppose you want a house. What if you need a new car? What if you want to start your own business? There are dozens of great reasons to get a loan but unfortunately your wedding probably isn’t one of them.
Despite all of these great reasons not to get a wedding loan, in some cases they may be a good idea. If you only need a few thousand dollars, then a wedding loan is still cheaper than putting everything on your credit card. However, at the end of the day, you’re probably better off just getting married with the money you can save, and then not starting out your marriage in debt.