Can I get a personal loan to pay for my wedding?

According to the Australian Securities and Investments Commission (ASIC), the average Australian wedding costs $36,000, once you tally up:

• The venue
• Food and alcohol
• The ceremony and rings
• Photography
• Entertainment
• Clothing and accessories
• Flowers
• Cars, hair, makeup
• Wedding night accommodation

A Moneysmart survey found that 82% of couples dipped into their savings to pay for their wedding, while 60% of surveyed couples got a loan and 18% used their credit card.

Using your savings account to pay for a wedding is relatively straightforward, though it relies on you having already been organised enough to have put a not-insignificant portion of your income aside for this purpose. 

Withdrawing money from your savings account to pay for a wedding means it will no longer be able to earn interest in your savings account, especially as many savings accounts pay a higher bonus rate to savers who make no withdrawals.

You could also consider accessing money in a term deposit, though you may need to provide at least a month’s advance notice to withdraw money before the term’s end.

Paying for a wedding with a credit card is possible, though it comes with its share of risks.

You could put individual wedding expenses on your plastic and pay them back as you go. But the longer you take to repay these expenses, the more you could be charged in interest, often at a significant rate. This could risk further blowing out the already high cost of a wedding.

Plus, as a credit card is a flexible line of credit, the temptation is there to put more of your spending on the card even after the confetti has settled, potentially putting you at risk of being trapped in a debt spiral.

A wedding personal loan lets you borrow a set lump sum, allowing you to set your wedding budget in advance. If you can stick to this budget, it can help minimise the risk of your big day’s expenses blowing out unexpectedly. 

Because the repayments and loan terms are arranged in advance, you can be confident that you’ll eventually clear the debt, with each repayment taking you one small step closer. And because it’s not easy to ‘top up’ a personal loan and borrow extra money, your risk of your debt spiralling out of control may be lower than with other finance options.

However, applying for a personal loan requires you to show a lender you can afford the repayments, based on your income and expenses. Also, many wedding loans are unsecured loans, which often have higher interest rates than secured loans. While true love may be a rare and precious commodity, banks tend to prefer something more substantial as collateral for a secured loan, like a car.

Finally, the success of your personal loan application may be affected by your credit score. If you’ve had problems borrowing and repaying money in the past, it may not be as easy to take out an affordable wedding loan. 

You can check your credit score in advance to get a better idea of how lenders see you. You could also consider checking your credit score again after the wedding if you and your spouse decide to combine finances and/or change your names, just in case this affects your credit histories. 

Before you apply for a wedding personal loan, consider comparing a variety of wedding loan options from different lenders. Look at more than just the interest rate, as you may also have fees to pay, and some personal loans may offer flexible features that could add extra value for your financial situation.

One quick way to compare personal loans is to look at their Real Time Ratings™ - RateCity’s scores out of five based on a combination of cost and flexibility. These ratings are updated frequently, so you can be confident in their accuracy at any given time.  

Once you’ve found a personal loan option, contact the lender to complete an application, either online, in person or over the phone. Make sure you have documents handy to prove your identity, income, and expenses. Some lenders will be able to approve or decline your application instantly, while others may take a few business days to process your application.

If your wedding loan application is approved, you may receive the money in your bank account within another business day or even sooner, ready to be put to good use in the name of love.