Many recently engaged couples can’t wait to dive right into wedding planning. Besides, it’s so easy to get (happily) lost in the venue search, floral details and the hunt for the perfect photographer. But before you can dust off your Pinterest board, you need to figure out how you’re paying for your wedding in the first place.
A LendingTree survey found that 67% of newlyweds took on debt to pay for their wedding — with 11% taking out a personal loan.
While personal loans can be used to pay for such large expenses, there are a few guidelines you should consider when it comes to smartly using a personal loan to cover wedding expenses.
Can you get a loan for a wedding?
Bad credit? You can still get funding for major expenses.
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Annual percentage rate (APR)
Wedding loan do’s
Here are some factors to consider as you apply for a personal loan to cover wedding expenses:
Do: First turn to your savings
Turn to money you’ve already saved for your wedding first, then use a personal loan to cover any cost gaps your savings can’t cover. Doing this lets you reduce the amount of debt you’re on the hook for. Also, factor in any financial assistance you and your partner might be receiving from family members.
Do: Create a wedding budget
When you apply for a personal loan, you need to request a specific amount of money, which means you need to know exactly how much to take out before you submit an application. Applying for more than you need “just to be on the safe side” can actually work against you; personal loans aren’t free money and you’ll need to pay it all back, so applying for more than you need can increase your monthly payment. You should also factor in any fees since they will be deducted directly from the loan proceeds.
Do: Apply with good credit
Lenders use your credit score to determine what interest rate to charge on the loan. A higher credit score can get you lower interest rates, which saves you money. But a lower credit score typically means higher interest rates, which means the loan becomes more expensive. You can potentially save yourself hundreds or even thousands of dollars just by applying with a healthy credit score.
LightStream is one lender requiring good to excellent credit. It’s a great choice when you need funding fast: receive your funds on the same banking business day you apply, if your application is approved, you electronically sign your loan agreement and you verify your direct deposit banking account information by 2:30 p.m. ET. If you can’t make this deadline, you should be able to receive your funds the next business day. LightStreamdoesn’t charge any origination fees, late fees or early payoff fees. You can apply for as little as $5,000 and as much as $100,000 with LightStream, so there’s a lot of flexibility here to work with most wedding budgets.
LightStream Personal Loans offer low APRs, no fees and the ability to apply online. Its terms are as long as 20 years, or 240 months.
- Same-day funding available through ACH or wire transfer (conditions apply)
- Loan amounts up to $100,000
- No origination fees, no early payoff fees, no late fees
- LightStream plants a tree for every loan
- Requires several years of credit history
- No option to pay your creditors directly
- Not available for student loans or business loans
- No option for pre-approval on website (but pre-qualification is available on some third-party lending platforms)
There are personal loan lenders who allow applicants with poor credit to apply, though always be aware that you’re likely to take on less favorable loan terms.
Upstart approves borrowers with credit scores as low as 300, as well as applicants with no credit history. The platform considers factors beyond credit, including education, employment and income. Loan amounts range from $1,000 all the way up to $75,000.
Oportun also accepts low-income and no-credit borrowers, with secured loan options in some states. The lender is good if you only need a small loan, as it approves loans for as little as $300.
Upstart offers accessible personal loans for people with fair or average credit.
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
Open to borrowers with no credit history, especially if needing only a small loan.
- Open to borrowers with no credit history
- No early payoff fee
- Same-day funding available
- Loan amounts as small as $300
- May charge an administrative fee of up to 10% of the principal
- Not available in all states
Do: Figure out what loan repayment will look like
Make sure you and your partner both feel good about taking out a loan to pay for wedding expenses, as well as have a plan for how the loan will be repaid. Debt can naturally be a point of contention in a marriage, so make sure you both agree on a plan for managing it.
Speaking to a financial advisor before borrowing money can help you figure out if you have the capacity to take on a loan, and they can help you find other ways to set aside cash for wedding expenses.
Wedding loan don’ts
Before you start filling out any loan applications for your wedding payment, remember the following:
Don’t: Ignore fees
Personal loans come with interest, but they may also come with origination fees, application fees and a prepayment penalty. Origination, administration and application fees are typically deducted from your loan proceeds. So, if you need a $10,000 loan but fees work out to $200, you won’t actually receive $10,000; you’ll receive $9,800 and you’ll be required to pay back the full $10,000 amount, plus interest.
Don’t: Open too many new lines of credit
Any time you apply for a new line of credit, your credit score temporarily decreases because lenders run a hard inquiry to view your credit profile. Some lenders may even reject your application if you have too many credit inquiries open at the same time. This is why you should plan thoughtfully and make sure a personal loan really is the right direction for financing your wedding.
Personal loan alternatives
Zero-interest credit cards are a strong alternative to personal loans because you can make interest-free payments for a limited amount of time. These cards work best when you can pay off your balance completely before the 0% APR introductory period ends; at that point, interest begins accruing on your remaining balance. The exact introductory offer period depends on the credit card you have.
The Wells Fargo Reflect® Card offers a 0% intro period for the first 21 months on purchases. It’s also a no-annual-fee card. The Savor Rewards from Capital One, also without an annual fee, offers no interest on purchases for the first 12 months. It’s a cash-back card that’s currently offering a $250 cash bonus once you spend $500 on purchases within the first three months from account opening.
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Best-in-class intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It’s an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
Foreign transaction fee
The Capital One Savor Cash Rewards Credit Card is one of the most rewarding options for earning cash back in categories such as entertainment and dining without paying an annual fee. Plus, you can combine its rewards with Capital One’s travel cards to convert them into transferable miles.
- One of the most rewarding cash back cards for entertainment and streaming services
- No annual fee
- Easy-to-earn welcome bonus
- High APR
- Requires a good to excellent credit score
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- For a limited time, earn a one-time $250 cash bonus once you spend $500 on purchases within the first 3 months from account opening
- $0 annual fee and no foreign transaction fees
- Earn unlimited 3% cash back at grocery stores (excluding superstores like Walmart® and Target®), on dining, entertainment and popular streaming services, plus 1% on all other purchases
- Earn 8% cash back on Capital One Entertainment purchases
- Earn unlimited 5% cash back on hotels, vacation rentals and rental cars booked through Capital One Travel
- No rotating categories or sign-ups needed to earn cash rewards; plus cash back won’t expire for the life of the account and there’s no limit to how much you can earn
- 0% intro APR on purchases and balance transfers for 12 months; 18.74% – 28.74% variable APR after that; balance transfer fee applies
- Top rated mobile app
Balance transfer fee
Introductory fee of3%of the amount of each transferred balance that posts to your account during the first 12 months that your account is open. After that,4%of the amount of each transferred balance that posts to your account at a promotional APR that we may offer you at any other time.
Just make sure the credit card limit is enough to accommodate the portion of your wedding budget you planned on financing. This way, you don’t have to apply for multiple lines of credit to cover expenses.
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