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Wedding Loans: How Do They Work & When Should You Consider One?

Getting a Personal Loan for Your Wedding
Lauren Ward
Lauren WardUpdated December 20, 2021
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
When you think about the largest expenses in your life, you probably bring to mind a house, a car, and your education. But in reality, paying for a wedding can rank near the top of that list as well. In 2020, the average cost of a wedding was $28,964, even with a pandemic halting large events for most of the year. Figuring out your wedding financing plan should be one of the first things on your to-do list. After all, you don’t know how much you should be spending until you know how you’ll be paying for it. Learn how personal loans for wedding expenses work and other alternatives to consider for your big day. 

What Are Wedding Loans?

Getting a wedding loan is one option to help pay for some or all of your celebrations. But most lenders don’t even advertise these specifically because it simply entails using a personal loan for wedding expenses. In fact, uses for a personal loan are wide and varied, typically for almost anything from paying off medical bills to purchasing a car — and even paying for your wedding. So while a lender may advertise that a loan can be used for a marriage celebration, they’re really just referring to a personal loan. 

How Do Wedding Loans Work?

Using a personal loan for a wedding starts with the application process. You can typically get a quote on loan terms by filling in a short form with information like your credit score, income level, and current finances (such as your savings and debt). If approved, the lender communicates how much you can borrow, your interest rate, loan term, and monthly payment amount. An unsecured personal loan doesn’t require collateral to secure the loan. But it’s smart to check the loan terms to fully understand what may potentially be charged, such as fees or penalties, as well as repayment details.Once you sign the loan agreement, you’ll receive the borrowed funds as a lump sum so you can start making deposits and paying wedding vendors. Then you’ll start making monthly payments on the personal loan until the entire balance is repaid. 

What Can You Use a Wedding Loan For?

Loans for wedding expenses can be used for anything related to the big day. You don’t need to show any type of receipts or justification to the lender. You simply need to make your loan payments on time. Here are common examples of how you could use a loan for a wedding:
  • Venue 
  • Catering
  • Decorations
  • Attire
  • Rings
  • Destination travel costs
  • Rehearsal dinner
  • Liability insurance
  • Honeymoon
Wedding personal loans can range anywhere from a few thousand dollars to $100,000, depending on the lender and your eligibility as a borrower. 

Benefits of Using Personal Loans For Your Wedding

It’s important to weigh both the pros and cons of personal loans for your wedding. Here’s what to consider.  
  • Get quick funding. Most online lenders process loan applications quickly. If approved, you could get cash transferred to your bank account as fast as the same day. 
  • Avoid credit card debt. You may qualify for a better interest rate on a wedding personal loan than you would when charging those expenses on your credit card. Plus, you’ll repay the funds over a fixed loan term, instead of potentially dragging out credit card debt with minimum payments. 
  • Pay vendors who don’t accept credit cards. Not all wedding vendors accept credit cards, and some may charge an extra processing fee if you do opt to charge the costs. Using a wedding loan lets you pay with a check or cash instead.
  • Enjoy fixed rates. In many cases, personal loans come with fixed interest rates. You’ll have a set payment that doesn’t fluctuate each month like a variable-interest-rate loan would. 
  • Improve credit score with on-time payments. Your payment history is one of the biggest contributors to your credit score. Since most personal lenders report to the credit bureaus, you can build a strong credit history by paying on time each month. 

Disadvantages of Using Personal Loans For Your Wedding

There are some drawbacks to taking out a wedding loan. 
  • Longer loan terms. Many personal loans come with terms between three and five years — and sometimes even longer. It may seem stressful to have to continually pay for an event that’s so far back in the rearview mirror of your life.
  • Increases your debt-to-income ratio. Taking on more debt has the potential to lower your credit score. Plus, the more money you owe compared to how much you earn (aka your debt-to-income ratio) impacts your ability to qualify for other financing, like a mortgage.
  • Rates could be high. Interest rates are determined by several factors, including your credit score. If your credit history is short, or you have no credit history at all, you may end up with a high rate in order to qualify for a personal loan. If a trusted person agrees to cosigning on a personal loan, that could help you get approved, but comes with its own set of risks.
  • Could overspend on your wedding. Having a plan for how you intend to spend the personal loan funds is a wise move. If you don’t have a clear vision of how you plan to spend and repay it, you could end up spending money on things you didn’t think about ahead of time or spending more than you originally intended to, simply because the money was available.

Should You Apply For a Wedding Loan?

Figuring out how to get a loan for a wedding is easy thanks to simple and fast online applications. But does that mean you should get a personal loan for your wedding? Here are some scenarios when it could make sense.
  • You don’t want to dip into your savings. Having an emergency fund is important. If an unexpected expense did occur, you wouldn’t have to scramble for a personal loan for emergencies since you have cash on hand. 
  • You can’t pay upfront deposits. Many wedding vendors require upfront deposits to secure their services. A wedding loan can help you cover those, even if you’ll have the cash later on to cover some or all of those costs. 
  • You don’t want credit card debt. If you don’t have enough cash to cover your wedding, a personal loan can help you avoid credit debt. Cards typically come with higher rates, plus a less predictable repayment schedule. 

Typical Repayment Options for Wedding Loans

Personal loans typically have a straightforward repayment policy. If you have a fixed-rate personal loan, you’ll have the same payment amount each month for the term of the loan. If the lender charges an origination fee, there are a few ways the lender might receive the fee. 
  • The lender may deduct the origination fee from the loan funds before they’re deposited into your account. Interest will accrue on the total loan amount, including the origination fee. 
  • Some lenders add the origination fee to the balance of the loan. As with the above scenario, you’ll be paying interest on the amount of the loan plus the origination fee. 
  • If you have the cash on hand, you may be able to pay the origination fee separately from the loan and not pay interest on that amount. 

Alternatives to Using a Personal Loan For Your Wedding

Unsure of whether a wedding loan is right for your event? Here are some alternatives to consider. 
  • Cash. Using your savings or a cash gift from a family member can help you avoid taking on debt and paying interest. However, using up your saved funds could put off other financial goals, like buying a house or paying down student loans.
  • Credit cards. If you already have credit cards, you may prefer to fund your wedding with those instead of applying for a personal loan. Just be aware of your existing credit card debt and how realistic it is for you to pay down a new balance in a timely manner. 
  • Home equity loan or line of credit. If you own real estate, you could tap into low-interest financing through either an equity loan or a line of credit. Rates are typically some of the lowest out there, but that’s because you use your home as collateral.

Compare Lantern’s Selection of Personal Loans

It’s smart to compare personal loan rates anytime you’re thinking about taking on a new type of financing. With Lantern by SoFi, you can access multiple wedding personal loan estimates by filling out one simple form. Not only is it convenient, it also helps you feel confident that you’re choosing the best loan for you. 

The Takeaway

If your wedding plan is underway and you’re looking for options to pay related expenses, a wedding personal loan may be something to consider. Including a spending plan as part of wedding planning is a smart financial move that can help minimize overspending.After you’ve decided on the amount you’d like to borrow, you’ll be able to see potential rates and terms from multiple lenders when you use Lantern by SoFi. Then you can compare and choose one that works for you.Check your rate at Lantern by SoFi.
Photo credit: iStock/marchmeena29
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About the Author

Lauren Ward

Lauren Ward

Lauren Ward is a personal finance expert with nearly a decade of experience writing online content. Her work has appeared on websites such as MSN, Time, and Bankrate. Lauren writes on a variety of personal finance topics for SoFi, including credit and banking.
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