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Spring and summer is prime time for weddings, which tend to come at a big expense. Check out some pros and cons of using a personal loan to pay for one.
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In 2022, the average wedding cost in the U.S. came in at a shocking $30,000, according to The Knot. That’s $2,000 more than the average wedding cost the year prior. It’s also a whole lot more money than most people can just take out of their bank account at one time.
If your own wedding is coming up and you don’t have the cash to pay for it, you may be thinking about taking out a personal loan to finance it. But is that a good idea? Here are some things to consider in making your decision.
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The pros of paying for a wedding with a personal loan
Here are some of the biggest benefits of paying for a wedding with a personal loan:
You can fund your dream day. Many people have been planning their wedding in their mind since they were kids. And their wedding day may be one they remember forever. Taking out a personal loan to fund this magical experience may feel well worth it.You can get a lower interest rate than with many other kinds of debt. Personal loans typically have a lower interest rate than credit cards. So, if you have to borrow, it makes sense to choose the option with the lower interest rate.You’ll know the total costs and your debt-free date upfront. Unlike credit cards, personal loans can come with fixed monthly payments if you choose a fixed-rate loan. And, your payments will be set so your loan is paid off in a designated time, like five years or seven years. So there will be no surprises or confusion about how long you’ll be in debt. You’ll know exactly what you are committing to.
The cons of paying for a wedding with a personal loan
It’s important to make sure the cons don’t outweigh the pros before moving forward. Here are the biggest downsides:
You’ll be starting your married life with debt. Money is a leading cause of relationship problems. Starting out with debt may only serve to add to the financial stress you experience, which could set you up for more money fights.You’ll be making your wedding more expensive. By adding on interest charges, you’ll be further increasing the cost.You’ll be paying a lot for something that doesn’t increase your net worth. While a wedding is important, it’s a one-day event. Is it really worth borrowing and potentially having to pay back a loan for years? Will you be happy making these payments five years in the future when the wedding day is a distant memory?You could take longer to accomplish other financial goals. When you tie up your monthly income in a wedding loan payment, you won’t have as much left to save for other things — like a family home.
For some people, these downsides far outweigh any benefits of borrowing for a wedding.
What are your other options?
If you don’t want to start your married life off with a new debt, you have other options. The best is to pay cash for a wedding, even if that means you have to save up or scale down your expectations. If your family is willing to help, they could also offer assistance.
You can also look into using a 0% APR credit card, which would allow you to avoid interest on wedding costs as long as you paid off the balance in full before the promotional rate ended.
Ultimately, only you can decide if borrowing for your big day is the right move. But, remember, there’s a big cost to starting out your married life with a financial obligation that may not pay off for you in the end.
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