Wedding Loans

Weddings can be outrageously expensive depending on the location, the number of people you invite, and the extravagance of the happy couple. Based on the most recent statistics collected in 2017, the average cost of a wedding in Canada is $42,400. While some couples have weddings for less than $10,000, the majority of newlyweds host larger events with numerous social gatherings that include an extended mix of family and friends. As wedding costs start to add up, it can often get stressful for the bride and groom to continue paying out of pocket. This is where wedding loans can help save the (wedding) day!

Wedding loans are specialized unsecured loans with interest rates based on one or both partners’ credit history and scores. Credit cards with no interest can be cost-effective for those with excellent credit and a reasonable spending plan. Local and federal credit unions may have more flexibility when it comes to tailoring a loan’s amount, term, conditions, and interest rate to make it affordable.

To clarify, we do not recommend that newlyweds begin married life with a large debt load incurred from a wedding. A far better way to host a dream wedding is to save up for it. Not only will you avoid being in debt at the beginning of your new life together, but you’ll also learn to work together to achieve a common financial goal. This experience will be invaluable to your collective financial well-being in the future. However, even with the best-laid plans, people can sometimes use a little help. It is here where wedding loans can be used as a supplementary financing source rather than the key financing driver.

Percentage of Canadians borrowing money for their weddings bar graph

The first step to planning the financial aspect of your wedding is determining your priorities and being realistic about what you can and cannot afford. If you and your partner are planning on buying a new home after you’re married, or if you have other anticipated expenses on the horizon, you may want to consider a more conservative wedding plan. However, if a dream wedding for you and your families has always been a priority, then you will need to plan a bit to avoid running yourself into debt that you can’t manage.

Start with listing the main cost drivers of the wedding. This includes the venue, cake, catering for all attendees, and DJ/band. As evidenced, weddings are not inexpensive events. At the low end, a wedding with a close circle of family and friends can still rack up as much as $10,000 to $15,000. This is a recommended baseline for planning your wedding. Next, determine how much of your savings you are committing to the wedding. This will determine how much you need to borrow. Then, do some simple math, including determining your current combined household income and current combined household debt. This will provide you with your current debt-to-income ratio. If your debt-to-income ratio is less than 10%, you’re in very good shape. If you’re over 20% before the wedding, it’s time to look at your finances. That’s not to say that you can’t take on a bit more debt to get married, but if you have other anticipated expenditures that could potentially run you in the 35-50% debt-to-income range, a lavish wedding might not be realistic. That’s why it’s critical to completely understand your financial position before you plan and finance your wedding. And, do not haphazardly take into account how much you might receive in cash gifts from your guests. For all you know, they might all knit you matching sweaters or buy you an automatic bread maker for your wedding gift!

Once you’ve determined that your wedding cost is realistic, and you need to finance part or all of it, there are numerous loan options available to you. The most common types of wedding loans are signature (personal) loans and revolving personal lines of credit. A signature loan is an unsecured personal loan that is usually valued between $1,000 to $35,000. These loans are fixed term and fixed interest loans that you pay in installments over time, usually on a monthly basis. The ongoing monthly payment consists of a portion of the principal borrowed amount, interest, and lender fees. The principal loan amount is given to you in full upon approval, and you’re free to spend it on your wedding needs. However, it does not replenish like a credit card or line of credit as you pay it down. If your wedding costs more than $35,000, it may be possible for your spouse-to-be or another close relative to take out a second personal loan to offset the additional expense. However, this decision should not be taken lightly. When considering your wedding costs, responsible borrowing is an absolute must to avoid incurring a large debt load right at the beginning of your new chapter in life.

A revolving line of credit is usually valued between $1,000 to $35,000, and the cash becomes available for use upon lender approval. The difference between a revolving line of credit and a signature loan is that the revolving line replenishes itself as you pay it off. This means that you’re not tied to a specific loan amount – just a maximum specific line amount at any given time. Personal lines of credit also generally have adjustable rates over time, and interest is determined on spending and repayment (i.e., if you carry a higher balance on the line for a certain amount of time, you pay higher interest (or lower in some cases). If you have average to great credit, this may be a much better option than spending cash or taking out a “hard money loan”.

Though a short-term credit card might be an option, using cards to pay for your wedding is not the best option. Generally speaking, credit cards carry much higher interest rates than personal loans and credit lines, and some even have “triggered” higher interest rates if you spend near the maximum available balance. There are some cards with low-interest rates upfront. So, if you’re able to pay off the balance and close the card within a specific amount of time, this might be a viable credit source. But, be sure to read the fine print of any credit card agreement to ensure you’re not getting pulled into an unsavory credit relationship.

Once you have received your loan or line of credit, it is imperative to stick to your wedding budget. Sites like have many wedding planning features available, including budget management tools. It is easy to overspend when you’re using borrowed money, so it is important to set and strictly adhere to your financial plan. Whether it’s the cardstock for your invitations or the size of your wedding cake, any additional expenses will add up quickly and potentially create a wedding financial crisis. Wedding loans can also be used for wedding-related costs such as an engagement ring, a honeymoon, or a wedding shower. Be cautious to ensure you don’t run out of money. Some ideas to save money when planning your wedding include:

  • Printing your own schedule of events, wedding invitations, table cards, and other print items;
  • Having a paid bar instead of an open bar (collective sigh);
  • Serving finger foods such as canapés and appetizers instead of full entrees;
  • Downsizing your whole wedding in general and keeping it to close relatives and a tighter circle of friends;
  • Working with a local designer for the wedding dress or other wedding party apparel;
  • Getting a smaller ring (we cannot guarantee your partner will agree!);
  • Having a local bachelor or bachelorette party.

Getting a wedding loan is as simple as requesting a personal loan or line of credit with your bank, credit union, or online lender. Most banks won’t advertise “wedding loans” specifically, but there are many companies that specialize in unsecured personal loans for such a purpose, so be sure to shop around for one that is tailored to your needs. If you have a good FICO score, you should be able to take out a loan with a competitive Annual Percentage Rate (APR) quite quickly. In most cases, you will need the normal types of application data to apply for the loan. This includes details such as your residential address, your employment and income history, including pay stubs or annual tax returns, your Social Insurance Number (SIN), proof of your monthly rent or mortgage payment, and any other details deemed necessary by the lender. The loan may even be approved and funded within one or two business days.

Credit Tips!

Temper your expectations. Though we have all seen the movie-like dream weddings online, the fact is that you can have a great wedding experience even without all of the excessive fanfare. Focus on the personal aspects of your wedding instead of what you may feel is socially expected and will look good on Instagram. Remember that though this is an important day in your life, it is still just one day (or maybe a weekend), and you have a whole life ahead with your new partner. Setting yourself up for a financial catastrophe due to wedding overspending is just not worth it, not to mention that it is a very tricky way to start your new life.

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