Getting A Loan for a Wedding: Walk Debt Aisle
It is a couple's dream to have a ceremony when walking down the Aisle. Many big expenses may accompany this. Remember, love may be free but wedding promises and white lace may cost you big bucks.
Many modern couples are not likely to forget about the cake and dress but in the process, other major wedding expenses slip in the budget which includes setting the Venue and how to get there, photos of posterity, flowers, and décor. Most of all is the music so that the guest can dance the evening away.
Therefore, brides may need to find the best wedding finance option to cater for the wedding budget, this includes considering applying for loans for wedding expenses to avoid inconveniences during the wedding.
What is a wedding loan?
In cases where the wedding finance option you selected does not cover all the wedding expenses, you may further consider taking a personal loan for a wedding to help sort the remaining wedding requirements. A wedding loan is an unsecured installment loan that you borrow for wedding expenses and pay back in monthly installments.
How Lenders Offer Wedding Loans
1. Credit Union
Credit unions offer personal loans although you need to be a member to sign up a loan with them. They generally offer a better personal loan rate than traditional banks.
A loan for a wedding is just but one of the personal loans offered by some of the traditional banks. Taking out a loan for a wedding from these traditional banks is always not the greatest or best option because they not only have the strict credit scores requirements but also high rates and terms for borrowers
3. Online Lenders
They offer better terms to borrowers than traditional banks. They even give loans for wedding expenses to borrowers whose credit scores do not qualify them for a bank loan. Online lenders look for characteristics of the borrower that contributes to his/her creditworthiness. This may include having earned a college Degree or good utility payment history.
My advice to a borrower is that you ought to be very careful before signing anything. There are lenders who will try to twine you into bad wedding loans.
Can one get a Wedding Loan with Bad Credit?
It is important for any couple planning on taking out a loan for a wedding to be clear of bad credit. Improving your credit score as a borrower will help you get a better loan for a wedding. You should improve a less-than-excellent score before applying for a wedding loan by:
Not opening a new credit card account
By applying for a Credit-card, it affects your credit negatively, this can result in a reduction on your credit score by around five points.
Making credit payments on time
In this case you, I would advise you to set up reminders to ensure you are never late with your monthly payments.
Paying down credit card debt
You should stop using your credit card as you focus on reducing the balances you carry in them.
Who Qualifies to get a Wedding Loan?
Reliable lenders have different criteria to decide who to give a loan. This is the more reason couples planning to apply for loans for wedding expenses should be in terms with the following factors:
- Debt-to-income ratio: this refers to all your monthly debt as a percentage of what you earn per month. The standard rule of thumb state 36% or below is a good Debt-to-income. All lenders consider Debt-to-income differently to assess potential Borrowers.
- Credit scores: The best rates and terms go to those with credit scores that are higher than 700. Many lenders want credit scores of at least 600.
- Credit history: lenders are usually interested to see a minimum of three years credit history of the borrowers. There should be no bankruptcy within the past one to two years.
- Employment: Most lenders prefer borrowers with consistent income and steady employment.
How do you Apply for a Personal Loan?
Individuals planning to walk down the aisle must first sort their wedding finance issues, if they do not have enough cash to cater for all their budgeted expenses, there is always the option of taking out a loan for a wedding to help cater for the wedding expenses. Applying for this personal loan usually takes a two-step approach as discussed below:
Step one – Formal application: Done when you receive a pre-qualified rate. Here the information to include is about employment and housing situation and security number. The information must be accurate. A good rule of thumb is to relate at least three prequalified offers before submitting a formal application to the lender.
Step two – Pre-qualification: Here you get your first loan offer based on the information you will have supplied. Prequalifying will neither affect your credit score nor your credit history.
Remember, interest keeps on accumulating over the term of the loan, therefore, avoid lower monthly payments because they stretch over a longer time.
Your wedding day should be a joyous send-off into your new life. Therefore, you should only take out a loan for a wedding if you have no other option. Remember, taking on a debt needlessly can hamper that wedding happiness. Weigh the options available and choose the best.