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Your wedding is one of the most important events of your life, but it comes with a hefty price tag, often in the form of a personal loan to help pay for the wedding. On average, Americans spend more than $35,000 on their nuptials, according to The Knot.

Even the most responsible, budget-conscious bride or groom may have a hard time covering those costs, and wedding loans can fill in the gaps if your funds fall short. Before you consider paying for a wedding with a loan, however, you should understand what that entails, and carefully consider every other option available.

What is a marriage loan?

Lenders market “wedding loans” to brides, grooms and their families, but what they’re actually offering are standard unsecured personal loans (sometimes called signature loans), that borrowers can use to pay for virtually anything, not just wedding-related expenses.

Even if a lender’s loan application asks you the purpose of the personal loan — and you reveal that it’s for a wedding — that answer doesn’t factor into the approval or loan terms you’re offered.

“I think to some extent the reason for asking [the loan purpose] is for tracking purposes,” said credit expert John Ulzheimer. “You can use the [loan] money for a wedding, to pay off credit card debt, to add a garage to your house, or put it all on black on a Las Vegas roulette wheel.”

So the question for someone who wants to understand “wedding loans” is really:

What is an unsecured personal loan?

Simply put, an unsecured personal loan is a loan that a lender gives you in one, upfront lump sum, and you pay back the principal and interest in a set number of consistent monthly payments.

Unlike secured loans, lenders don’t require you to put up any collateral for unsecured personal loans. Rather they approve you for one — and decide on your loan’s interest and terms — based on how confident they are you’ll pay it back in full and on time.

In other words, you qualify for an unsecured personal loan based on your creditworthiness.

Once you get your personal loan, lenders don’t keep tabs on how you spend the money. If you’re using it to finance your wedding, the money can go towards buying an engagement ring, a bridal gown, reception catering, or any of your other wedding obligations.

Where can I get a wedding loan?

Personal loans for a wedding are typically available from three sources:

  • Banks: Some traditional banks offer personal loans, but their rates and terms are often not the best ones available, and they tend to have the most strict credit-score requirements for borrowers.
  • Credit unions: Non-profit credit unions may offer better personal loan rates than traditional banks, but you generally need to be a member to take out a loan there.
  • Online lenders: The new crop of online lenders often offer better terms than traditional banks. They’ll often loan to borrowers whose credit scores don’t qualify them for bank loans, but who have other characteristics that contribute to their creditworthiness, such as good utility payment histories or having earned college degrees. Marketplaces like Credible allow you to compare options from multiple online lenders in one place, so you can find the best offer out there.

Shady lenders may try to rope you into bad wedding loans, so be cautious before you sign anything. Steer clear of lenders who guarantee loans without checking your credit, or who charge you fees just to apply. Payday loans, for example, are very risky and are last resorts for people with serious credit problems facing financial emergencies. They charge exorbitant interest rates with very short repayment terms and often trap people in cycles of debt.

Who can get a wedding loan?

Reputable lenders use different criteria to decide who they’ll loan to. In general, factors they consider include:

  • Credit scores: Most lenders require credit scores of at least 600, with the best rates and terms going to those with scores higher than about 700.
  • Debt-to-income ratio: Your DTI ratio refers to all your monthly debt as a percentage of what you earn each month. The standard rule of thumb says 36% or under is a good DTI, although lenders all weigh DTIs differently when evaluating potential borrowers.
  • Employment: Most lenders favor borrowers with steady employment and consistent income.
  • Credit history: Many lenders want to see one to three years worth of credit history with no bankruptcies within the past one or two years. Keep in mind, your credit history also contributes to your credit score.

Can I get a wedding loan with bad credit?

Generally speaking, improving your credit score will help you get a better loan. If you have at least six months until you must start paying wedding bills, you should work to improve a less-than-excellent score before applying. This includes:

  • Making credit payments on time: Set up reminders to ensure you’re never late with your monthly payments.
  • Paying down credit-card debt: Stop using your cards while you focus on reducing the balances you carry on them.
  • Not opening new credit-card accounts: Credit-card applications trigger “hard pulls” on your credit, that can reduce your credit score by about five points.

How much can I borrow in wedding loans?

Typically, borrowers can take out personal loans for $1,000 to $50,000, although some lenders will lend you as much as $100,000. Interest rates typically fall between about 5% and 36% for terms of three to five years.

The more creditworthy you are, the better your rates and terms will be, although specific offers for the same applicant vary from lender to lender.

For many people, personal loans have lower interest rates than the credit cards for which they’re qualified, but wedding loans for bad-credit applicants will likely have the highest interest rates, and end up costing those borrowers with poor credit a lot in interest.

It’s best to create a detailed budget for your wedding before you think about taking out a loan. Your loan request should be the minimum of what you need for your wedding finance needs — don’t pad it with anything “extra.”

Minimizing the amount you borrow will help you get the best rates and terms for your needs, and ensure manageable monthly payments.

For example, a $10,000 loan for a five-year term, at 12% interest, will cost you about $222 in sixty monthly payments. You’ll pay back more than $3,300 in total interest.

Bumping that loan up to $15,000, even if everything else stays the same, will cost you about $333 each month, and you’ll end up paying more than $5,000 in total interest.

How do I get a wedding loan?

Applying for a personal loan is usually a two-step process.

  • Step 1 – Pre-qualification: During this stage, you’ll get preliminary loan offers based on the general information you supply. If you use Credible for example, you can submit basic personal details and your loan amount request to see if you are eligible for a loan from one of Credible’s lender partners, and what rates you prequalify for. Pre-qualifying will not affect your credit score.
  • Step 2 – Formal application: If you receive prequalified rates, you can submit a formal application for the option that is best for you. Make sure the information you provide — at a minimum, this will include information about your housing and employment situation, and your social security number — is thorough and accurate. Submitting formal loan applications can shave a few points off your credit score, so proceed only when you’re certain. A good rule of thumb is to compare at least three prequalified offers before submitting a formal application.

When weighing loan options, you’ll want to consider not just the monthly payments for each, but the total costs associated with each loan, including origination fees, pre-payment fees, and late payment fees.

And remember, lower monthly payments stretched over a longer time may cost you more in the long run, because interest will keep accruing over the term of the loan.

What are alternatives to wedding loans?

Real talk: an unsecured personal loan should never be your first choice to pay for your wedding.

Taking on that kind of debt, especially when starting a major new chapter in your life, can undermine your ability to meet other financial goals, like buying a car or home, or paying off your student loans.

If you can’t afford your wedding, you should first try to reduce its cost — whether that means having it on a weekday instead of a weekend, or offering hors d’oeuvres rather than a full meal — to allow you to stick to a realistic budget.

Another option is to consider how much your family can contribute. On average, a bride’s family chips in $12,000 and a groom’s $7,000, according to WeddingWire.com. Some brides and grooms will pay back family members if their families can’t afford to pay for the wedding outright.

If you’ve reduced your wedding costs and factored in your family’s contributions, but you’re still falling short, you still have some alternatives to unsecured personal loans:

  • Credit cards: If you have excellent credit (a FICO score of at least 700), you may qualify for a 0% introductory APR credit card. This might be a better option than a loan, especially if you’re sure you can pay off your wedding-related charges within the introductory 0% APR period, typically up to eighteen months.
  • Secured personal loans: You may be able to put up your bank account or other assets as collateral for a secured personal loan, which may give you a better loan rate or allow you to qualify in the first place if your credit is poor. Be careful about taking on this type of loan, however, because you can lose your collateral if you don’t repay.
  • Home equity loans or lines of credit: If you own a home, you may be able to take out a home equity loan or open a home equity line of credit (HELOC) with better interest rates than unsecured personal loans. Do your homework before going down this road. Many personal finance experts caution against using either option unless the funds are going into home improvements that increase a home’s value.
  • Co-signer: If you can’t qualify on your own, you can enlist a co-signer with better credit than yours to co-sign your unsecured personal loan with you. Essentially, a co-signer promises to pay back the loan if you fail to do so. Not all financial institutions offer this option, and it’s risky for the co-signer because his or her own credit is on the line, so make sure that both you and your co-signer carefully weigh the pros and cons and know what you’re each signing up for But if this is an option, this may help you get a loan on better loan terms than if you were taking the loan out by yourself.

Remember, your wedding day should be a joyful send-off into your new life. Taking on debt unnecessarily can hamper that happiness. Pursue a loan only if paying outright is absolutely impossible and if no other options are available to you.