When you’re planning the type of wedding you’ve always dreamed of, money will play a big part in proceedings. The average cost of a wedding in the UK varies significantly but one recent survey concluded that the average cost for a traditional wedding in the UK was between £24k and £27k including the honeymoon! Hard to believe but when you start adding up all the different costs such as wedding venue hire, photography/video cost, entertainment, wedding dress, wedding cake, car, flowers the list goes on; you’ll quickly come to the conclusion that you’re more than likely going to need a little help to pay for it all.
Typically there are 3 ways that couples fund their wedding:
- Help from parents and relatives
- Save on your own
- Use credit cards or secure a wedding loan
However, you cannot just go to a bank and ask for a wedding loan, as there is no such thing as wedding loan. Rather, it is a personal loan that would be used for securing funds for your wedding. To understand the pros and cons of a wedding loan, you should first understand person loans.
As the name suggests, a personal loan is a loan that is given to individuals for personal use. Unlike home loans and vehicle loans that require a security, personal loans are given without any security. The one who takes a personal loan is himself/herself a security and its repayment is subject to the income of the borrower. In other words, personal loan or the wedding loan as we are referring to it here in this article is an unsecured loan. Before taking one, you should take into consideration the following advantages and disadvantages of a personal loan for wedding purpose.
Advantages of Personal Loan taken for wedding purpose
- As compared to other forms of loans, the entire process of personal loan right from applying to disbursement takes less time. This is the reason that makes those in need of urgent funds count on personal loan.
- The biggest advantage of personal loan is that it can be used for a wide assortment of purposes. This is in contrast to the other forms of loans, such as vehicle loan that can only be used for purchasing a vehicle; a home loan can only be used for constructing or purchasing a house and more.
- Personal loan comes to rescue when people are unable to get a loan for they don’t have any fixed assets in their name. This happens because personal loans do not require collateral security.
Disadvantages of Personal Loan
- Personal loans carry a very high interest rate, which is indeed the biggest disadvantage of these loans. As these loans are unsecure in nature, so the lenders and the banks charge higher rate of interest to cover the risk involved.
- Getting personal loan for wedding purpose doesn’t take much time but it is not an easy job to secure one. Only those with a good credit rating and a good credit history are eligible to get a personal loan. When talking about the disadvantages – talk about lenders taking your credit score into account and if you’re unsure about your credit score then use a free service like ClearScore that allows you to check exactly what information is registered against your name at the credit-reference agencies before applying for loans.
- Yet another disadvantage of a personal loan is that many banks and financial institutions do not accept part repayment of the loan. This feature turns out to be a major downer for a borrower, as the debt continues to get bigger and bigger due to the high rate of interest. On the other hand, other loans do allow borrowers to repay in part payments.
Is it ideal to get a wedding loan?
After knowing the advantages and disadvantages of a personal or a wedding loan, it would be much easier for you to decide whether you want to take one or not.
With a wedding loan, you would be covering your wedding costs with the money that is not yours. This would cause a financial burden on you, so get one if you feel you and your partner would be able to repay soon after the marriage – after all you don’t want to start your married life together in debt.
Article Submitted By Community Writer