Your wedding marks an important chapter of your life. As exciting and emotional as this special day is, it can be a tad too expensive to execute if you don’t plan it properly. It doesn’t take long before the wedding thrill takes over, making you go over budget with the wedding expenses slipping out of hand. So, here are seven tips for managing your wedding costs like a pro.
What are Wedding Loans?
A Wedding loan is essentially an unsecured personal loan with which you can borrow over a fixed period to cover your wedding expenses. Personal loans are a more accessible option for wedding expenses because these loans don’t require any collateral security. Wedding loans enable you to spread your wedding expenses across affordable monthly instalments, along with interest over a fixed span.
You can borrow anywhere between £1,000 and £15,000 with a wedding loan. Some lenders may have a higher lending limit – up to £25,000. If you want to borrow a more sizeable amount at lower interest rates, you will need a stellar credit history and stable income to prove your creditworthiness and repayment capability.
Repayments are key to responsible credit behaviour. It is important to pay your monthly instalments on time and in full. Plus, if you miss too many payments, the lender can get a County Court Judgement (CCJ) issued in your name. CCJs potentially stay on your credit report for six years and could cost up to 250 credit points.
Personal loan for Wedding Expenses – is it right for me?
Your first and foremost step should be to figure out a suitable loan amount by assessing your income and expenses. It is important to ensure that you can afford to repay this amount within the set term of the loan. A good way to go about this is to credit a tentative budget a few months before taking out a loan. But since you have to pay interest on each monthly instalment, a long term loan may ultimately cost you more.
Since your credit score plays a significant role in the lending decision, consider the following tips to improve your credit score before applying for a loan:
- Get yourself registered on the electoral roll
- Space out your credit applications by 45-60 days
- Adhere to the repayment schedule for bills or debt payments
- Dispute any errors on your credit report.
Pros and cons of Small Wedding loans
- Lower interest rates than credit cards and authorised overdrafts.
- Freedom to choose the desired loan term.
- Fixed monthly payments help you budget and set aside money.
- You can borrow a more significant amount than with a credit card or overdraft.
- Quick disbursal.
- You need a decent credit score to qualify for the loan.
- Some lenders set high-interest rates on smaller loan amounts (£2000 – £3000), which may ultimately incur a greater cost.
- Missed payments can eat up to 80 credit points from your credit score.
- Some lenders charge a prepayment fee if you pay extra towards your debt before time. This fee could be as high as a month’s interest.
Seven tips for managing Wedding Costs like a pro
- Use cashback websites for most of your purchases. You can even get a cashback credit card, giving you up to 10% cashback for minor purchases.
- Get a credit card with 0% interest. Most companies offer a 0% interest promotional period for up to 1 year. So, be sure to settle the balance before the end of the promotional period.
- Some banks offer cash back or free travel insurance for setting up a new account. If you find such an offer, you could set up a new account with this bank to avail of the benefits. Plus, the free travel insurance could cover your honeymoon!
- You could use loyalty cards for supermarkets. The more you buy from them, the more points you earn on the card. This could come in handy if you’re bulk buying stuff for your wedding. You could redeem all your points while stocking up wine and champagne for your wedding.
- Deposits eat up a major chunk of your wedding budget. It would be wise not to pay deposits to any vendors unless you’re certain. Cancellations can take away 20-30% from your deposit. So be sure that the vendors are right for you before you pay a deposit.
- Instead of fancy wedding invitations, design your e-invites yourself and share them via email or text. Save the date emails could save you’re a lot of time, effort and money. Plus, you’ll add a personal touch to your wedding invite. A bulk email does the job for you.
- Saturdays are high demand wedding days, due to which venues hike their prices to maximise profits. Many millennials are now avoiding a Saturday wedding. Over 46% of couples are resorting to the non-Saturday wedding trend. One key reason is the availability of wedding venues on other days of the week. Secondly, you could save up to £1,500 by shunning the Saturday wedding trend.
Some wedding costs are unavoidable. But you can always find cheaper alternatives and save as much as you can. From the venue to transport and the all-important wedding dress, you’ll still need some cash to make your wedding dream a reality. Instead of putting off those essential bills and living on the bare minimum on the run-up to your wedding, consider a wedding loan to help you spread the cost. Read more