SoFi

If you’re currently in the process of planning a wedding, you’re likely enjoying the endless cake samples and making difficult decisions, like whether to have a donut bar or a candy station at the reception.

Unfortunately, wedding planning isn’t just about delicious dessert samples and seating arrangement logistics.

It can be stressful, especially when it comes to figuring out how you’ll pay for all those savory and sweet treats and gift bags for your guests—let alone the rest of it like, you know, a dress, the actual reception hall, a minister, food, and an open bar if you’re lucky.

According to The Knot’s 2018 Real Weddings Survey, the costs of planning a couple’s special day now averages $33,931, though this number can vary greatly depending on where you live.

Expensive, densely populated cities like New York and Chicago will likely be more expensive than hosting a wedding in a more rural locale.

While there are ways to save on wedding costs—like cutting back on pricey place settings, keeping the wedding parties smaller, opting for a cash bar, and doing a bit of do-it-yourself craft work on flower arrangements—more couples are finding that they need a little bit of extra cash to get them through the wedding planning process. This is especially true when every vendor seems to require an immediate deposit.

That’s why some turn to wedding loans as an alternative to funding their weddings upfront.

Find a venue right out of a Pinterest post, but need a $10,000 deposit by next week to secure it?

Try on the dress of your dreams, then discover it’s $2,500 more than you have in your checking account?

Want the band of your dreams to play but need to plunk down cash to get them?

If your savings are coming up short, an unsecured loan could be just what you need to keep your dream wedding from being derailed. Here’s some more information about the ins and outs of wedding loans to help you decide if it is the right choice for your big day.

What Is a Wedding Loan?

A wedding loan doesn’t come from a wedding fairy godmother with a wave of her wand—although that would make for a better story. Instead, a wedding loan is simply a personal loan that you use to pay for wedding expenses.

So, what’s a personal loan then? A personal loan is just as the name implies—a loan you take out for (almost) any personal reason at all. You could use a personal loan for everything from renovating your home, to consolidating high-interest credit debt, to paying for a vacation or a wedding.

Personal loans are typically given out as one lump sum. For example, a person could take out a $10,000 personal loan for their wedding. They’d receive this payment upfront and could use the cash immediately.

The lender and the recipient would agree upon a repayment plan as part of the terms of the loan. These specific terms will vary by lender but, typically unsecured personal loans are paid back within one to five years.

A personal loan can be either secured or unsecured. With an unsecured personal loan, a lender won’t require a collateral asset. With a secured loan, the lender could require collateral or could require a co-signer on the loan—like a house or other asset of value.

Most lenders also allow borrowers to pay off the loan early, regardless of the loan term. That means if you happen to get a lot of cash as a wedding gift, you could use it to pay on your loan in part or in full.

Consider reviewing the terms and conditions completely before borrowing any loan, while not all lenders do, some may charge a prepayment penalty.

Variable-rate loans may also help save money on interest in the short-term, but it could rise in the long run. Fixed-rate loans mean the interest will remain the same as when the borrower signed on the dotted line, even if other interest rates shoot up faster than the price of a good DJ on a Saturday in the summer.

Considering a Personal Loan for a Wedding?

Personal loans can be a good option for those who have budgeted to pay for their wedding expenses, but just don’t have the cash on hand to cover immediate deposits or a slew of bills at once.

Maybe your parents committed to helping out with wedding costs and promised to send a cash infusion next month, but the florist whose work looks like a living Instagram photo will go with another couple if you don’t book now.

Or maybe you and your betrothed are putting aside a certain amount each month for wedding expenses, but you don’t want to put the catering deposit on your credit card because all the travel rewards points in the world will not outweigh the interest you’ll be charged.

In other words, if you have a good plan for paying your personal loan back and you just need it to bridge the gap, then a personal loan for your wedding might be perfect for you.

However, if you don’t know how you will pay off your loan but you really want a little extra room in your budget to buy that Vera Wang dress, you might want to think twice before signing on the dotted line for a personal loan.

The last thing you want to do is start your marriage off knee-deep in debt you can’t pay back, even if the pictures look amazing.

Pros and Cons of Wedding Loans

Need a little help weighing your options? Here are a few pros to getting an unsecured personal loan to help pay for your big day.

•   Personal loans are typically fast, easy ways to get some extra cash when you have to pay for deposits or cover expenses quickly for a wedding.

•   Many lenders allow you to apply for a personal loan online, making it easy and efficient to secure funding if you qualify.

•   Funds may be available in as little as one business day, depending on the lender. That way you won’t have to wait around to start putting down deposits and checking things off your wedding to-do list.

•   Personal loan lenders typically charge less interest than credit cards. This could make it a more financially viable option for those looking to pay off their vendors without paying extra in interest.

•   Personal loans are one way that could help build your credit over the long-term, if you pay them back on time, which is an excellent gift to give both you and your spouse on your wedding day. But, like all good things in life, personal loans have many downsides. Here are a few cons to be wary of before signing on the dotted line.

•   Personal loans can tempt people to spend more than they can afford. If you take one out, remember you have to pay it all back—plus interest.

•   Some personal loan lenders have prepayment or origination fees. Make sure to check the fine print before agreeing to anything.

•   It’s always a better bet to save up for anticipated expenses rather than financing them. Try to budget and save first, see if your vendors are willing to work out a payment plan, and think about what you really need versus what you want at your wedding.

•   You might be paying off your party years later, with interest. If you still feel like you need extra cash to fund your big day, check to ensure your personal loan has a lower interest rate than credit cards before taking one out.

How Much Can You Borrow for Your Wedding?

To qualify for a personal loan with a competitive rate, you’ll likely need a good credit score and a well-paying job, among other important financial factors, or potentially a co-borrower who has both of those things. Many lenders consider a good credit score to be anything above 700 , though this may vary depending on the scoring model used by the lender.

You might be able to get a loan if your score is below that, though it’s possible you’ll have to pay more in interest or you might qualify to borrow less money.

Things like how much debt you currently have, including student loans or a mortgage, can also impact how much you can borrow. At SoFi, we offer personal loans up to $100,000.

But unless you’re planning a wedding at the Plaza Hotel in Manhattan complete with champagne towers and children dressed as cherubs, it’s unlikely you’ll need that much.

Getting the Funds You Need for Your Wedding Day

Just like any loan, you need to have all your financial information and documents in order before you apply. Be sure to have things like proof of income, bank statements, information about your other debt, your Social Security number, and your identification ready.

With most online lenders, you can get pre-qualified and then decide whether to move forward with the online application. From there, you typically choose your rate, answer any additional questions, send copies of the necessary documentation, and sign the loan agreement all within a day or two.

Again, while saving up for your wedding is probably preferable to taking on debt before you say “I do,” expenses can arise that you may not expect, so knowing what your options are for personal loans can be helpful.

Don’t forget to do your research and understand everything you should be looking for in a lender so that you don’t get stuck with a loan that’s about as appealing as that ugly set of grey serving platters your Aunt Ina bought you for your wedding shower.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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PL17107

It’s not exactly a surprise that the average American has plenty of debt . Households with credit card debt carry an average balance of over $15,000. Frustratingly, these debts often come with exorbitant interest rates.

While some folks are able to manage their debts just fine, some may feel overwhelmed juggling loan payments of varying sizes with due dates scattered throughout the month. When life gets busy, missing a payment is too easy and can land you even further behind. Having multiple debts can be stressful and can make budgeting and planning for the future challenging. And let’s be real: No one likes feeling overwhelmed by multiple debt payments.

For most people, the goal with paying back debt—especially consumer debt, like credit card debt—is to do so as quickly and painlessly as possible. If this is your goal, you have options. One of those options is debt consolidation, where you pay off qualifying debts using a new loan, often called a “debt consolidation loan” or a “debt relief loan.” To determine whether consolidating your debts into one single payment is the right choice for you, read on.

Should I Consolidate My Debts?

It may be worth considering consolidation if it will help you simplify your finances and lower the amount of interest you pay overall on your combined sources of debt. For example, if you have multiple credit cards and each has a high interest rate, consolidating to one loan with a lower interest rate could get you out of debt sooner. That, and you could enjoy the sweet relief of only having one payment to manage for the debt you consolidated.

Consolidating your credit cards to a lower interest rate with a debt consolidation loan could help you get out of debt sooner.

Pros of Debt Consolidation

1) You can streamline multiple debts into one payment, making the payback process easier and more efficient.

2) If you consolidate your debt, you may pay less interest over the life of your loan.

3) Consolidating credit card debt can lower your revolving credit utilization ratio, which is a factor considered by most credit bureaus in the calculation of credit scores. If you lower your balance on several credit cards, but keep them open, you’ll decrease your credit utilization ratio. That’s a good thing! Revolving credit utilization ratios are also often considered by lenders when making credit decisions.

That said, debt consolidation isn’t for everyone. Taking out a new loan may come with fees, so you’ll want to do the math and make sure it’s worth it before moving forward. You should also be mindful of the repayment period and ensure you only finance the debt on a timeline that works for you. Be wary of a loan term that’s too long—even if the loan has a lower interest rate, you can pay more in interest over time with longer repayment periods.

Cons of Debt Consolidation

1) If the loan term is longer than necessary, you could potentially pay more in interest even if the rate is lower.

2) Some debt consolidation programs are scams. It is important to understand that not all loan consolidation tactics are created equal. There have been some unsavory and even fraudulent loan consolidation services that don’t really help get your debt under control. If a lender is asking for money upfront to consolidate your debt, for example, that’s a red flag.

How Do I Consolidate My Debt?

Debt consolidation, in theory, is very simple. You, or a lender, pays off all of your unsecured debts (like credit cards and personal loans) using a new loan. Then, moving forward, you’ll only make one monthly payment on your new loan.

A “debt consolidation loan” or a “debt relief loan” is often just a personal loan. This means that you have the option to seek out personal loans from reputable banks, credit unions, or online lenders. You do not have to work with a debt consolidation services provider that you don’t feel 100% comfortable with. Think of it this way: If it sounds sketchy, it probably is.

When it comes to low-rate personal loans, at SoFi we pride ourselves on transparency and a level of customer service unmatched in the lending industry. Also, our personal loans come with no origination fees, prepayment penalties, or late fees.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website on credit.