Congratulations! You’ve found the person worth spending the rest of your life with. This is one of the most exciting moments you will experience as an adult. Whether you just got engaged, are considering getting engaged, or you’re already planning your wedding, there are some things to consider. If you need help financing that big day, you may want to look into an unsecured personal loan for your wedding expenses.

Celebrating your union with your spouse by inviting loved ones results in unforgettable memories and joy. But do you know if an unsecured loan is the right choice to help you fund your dream wedding? 74% of couples consider taking on debt to pay for their weddings.

We’ll answer some of the most common questions brides ask when they’re considering unsecured personal loans.

1. What is an Unsecured Personal Loan?
2. Are There Loans Specifically for Weddings?
3. Is a Personal Loan a Good Idea for a Wedding?
4. How Much Can I Borrow?
5. Can I Use a Personal Unsecured Loan for the Perfect Engagement Ring?
6. How Can I Create my Wedding Budget?
7. How Will This Affect My Credit Score?
8. How Does Your Credit Score Affect Your Wedding Loan?
9. How Do I Find an Unsecured Personal Loan for My Wedding?
10. Is It Wise to Borrow a Little Extra? 

What is an Unsecured Personal Loan?

An unsecured personal loan is a loan that you can use for almost anything without having to put down collateral. Unique characteristics of an unsecured loan include fixed repayment time and a set monthly repayment amount. This can make your budget predictable and manageable.

You can find an unsecured personal loan from an online lender, a bank, or a traditional loan company. When shopping for a loan, you’ll want to compare interest rates, the term of repayment, and how much money you need. Different lenders will provide you with different offers depending on your credit score and proof of income.

Other types of common loans include secured loans, mortgage, and car loans.

Revolving loans are also a common way people borrow money. Credit cards are the most common form of revolving loans. Many brides max out their credit cards then get overwhelmed with repaying the money and the high interest rates. Other brides end up maxing out their credit cards, but still not having enough to cover everything they need. An unsecured personal loan allows you to borrow from one lender, have enough money to cover all of your wedding expenses and pay back the money in smaller monthly payments over 2, 3, 5, or 7 years.

Many brides fall into a situation where they have to borrow from friends or family. This is often referred to as “peer-to-peer” lending. It can be difficult to keep track of how much you owe family members, so make sure you keep a spreadsheet or repayment schedule. You also want to pay back family members fairly or in a way that won’t stress their financial situation. If you borrow from family, you can always ask them when they’d need the money paid back or use an unsecured loan to pay everyone back at once.

2. Are There Loans Specifically for Weddings?

With so many couples considering debt to pay for their weddings, it’s not surprising that there are lenders that have a category or page on their websites dedicated to these. Sometimes they will call these “special occasion” loans, but they’re just forms of unsecured personal loans. Even if a lender doesn’t have a “wedding loan,” you can still use any other unsecured personal loan for your special day. You will want to decide on which loan to choose based on the interest rate and repayment length that works best for you and your spouse.

Basically, don’t get tricked by one lender offering a “wedding loan” with high interest if you can find another unsecured loan at a lower interest rate or better repayment terms.

You may also find secured personal loans to help pay for your wedding. If you have bad credit, secured loans can be easier to find and have lower interest rates since they’re collaterally connected to your repayment. You will have to have to forfeit any possessions you use as collateral if you default on the loan.

No matter what loan you end up with, make sure you repay your loan on time and in full to keep your credit score healthy or to help improve it. You also don’t want to default on a secured loan lose your car or home.

3. Is a Personal Loan a Good Idea for a Wedding?

Yes, under the right circumstances and when handled responsibly. As with any loan, you need to look at your financial situation honestly and decide on whether the interest you will pay is worth the purchase you make with the loan.

Don’t borrow more than you need to cover your costs, and don’t borrow more than you repay. This can be tricky since you may have a different job or you may move to a city with a higher cost of living, but you should try to estimate how much you can spare month to month to repay your loan. If you cannot spare a lot, you’ll want a longer repayment period. If you don’t want to pay as much in interest, you’ll want to go with a short repayment plan.

Make sure you understand all the terms of your loan. One mistake borrowers make is they take on a loan with a longer repayment time than they need, then pay off the loan really quickly. This can result in a hefty prepayment penalty. A prepayment penalty is a fee lenders charge borrowers if they pay off their loan before the repayment term ends. Prepayment allows for a lender to recoup some of the money they’d make from the interest. Prepayment fees can vary quite a bit by the lender you use. It can be a percentage of the interest over the remainder of the loan term or just six months worth of interest. You will want to check this before committing to a loan.

An unsecured loan is often a better idea than using credit cards. The truth is you need to sit down with a clear budget, a calculator, and your spouse to compare your options.

4. How Much Can I Borrow?

The amount you can borrow often reflects your credit score and your income. When you’re applying for loans, you often have to prove to your lender that you’re able to repay in a reasonable timeframe. Some of the things you can prepare for potential lenders:

• tax returns
• pay stubs
• W-2s or I-9s
• bank statements
• credit history
• gift letters from family members that loaned you money
• photo ID like your driver’s license or passport
• rental history

Even if you bring all of these documents, some lenders will still ask for additional papers or explanations for any issues or irregularities they may find. If you have bad credit, this is more likely. It’s important to be open and honest with your lender so they can accurately assess your financial situation and how much they’re able to lend you.

5. Can I Use a Personal Unsecured Loan for the Perfect Engagement Ring?

Yes. As they say, “diamonds last forever,” so you’ll want to make sure you invest in a ring that’s worth of your love. If you find the perfect ring but don’t quite have the budget for it right now, you can use a personal loan to purchase your ring. Many jewelry stores will offer financing or even an in-store credit card to pay for your ring, but you can probably get a better interest rate and improve your credit score if you opt for a personal loan instead.

A personal loan for your engagement ring can be extremely convenient, as well. With a personal loan for your ring and your other wedding expenses, you can keep all of the wedding debt tied into one monthly payment and one lender.

6. How Can I Create my Wedding Budget?

Can you imagine walking down the aisle wearing your yoga pants and a tank top? Probably not, but how can you make sure you have enough to pay for the perfect wedding dress along with vibrant, fresh flowers? You need to budget for all the big things and small things.

The average cost of a wedding in the United States is about $26,000. You can use an app or wedding calculator to help keep track of everything you need for your wedding.

Make sure you adequately budget for:

• • Invitations: Wedding invitations can range from $50 to $500, depending on the quality and number of guests. You will also want to include self-addressed and stamped for your RSVPs if you don’t plan on creating a website for your wedding.

• • Venue: The venue will be your largest expense. This usually accounts for 40% of your budget, and the average venue costs between $12,000 and $14,000.

• • Decorations: This includes flowers, seat covers, centerpieces, and your aisle runner. This can run you about $300 to $3,000.

• • Attire: The average wedding dress costs $1,000, and the average cost for a wedding tux is between $200 and $500. You will want to decide if you pay for the bridal party’s dresses and the flower girls’ dresses, too. 
  • Ceremony Including the Officiant: Your wedding officiant will run you between $400 and $800. You may be able to ask a family friend to get licensed and marry you as a wedding gift, though. 
  • Drinks and Catering: A bartender service costs about $2,800 which means it will cost you about $16.50 for each of your guests if you’re serving alcohol. Your cake, and enough food to feed all of your guests, runs the average American couple about $13,000. 
  • Music: A band is typically more expensive at $4,000 while a DJ will be about $1,000. 
  • Transportation: To go and from the ceremony and reception, you will end up paying a limo service about $80 per trip. 
  • Photography: Don’t skimp on a photographer. You want quality pictures of your big day that you’re proud to display in your home. The average cost of a photographer is anywhere from $2,500 to $10,000. 
  • Programs: There’s a wide range you can spend on your programs depending on the number of your guests and the quality you’re aiming for. A program embossed on a printing press with cost about $6 per program. 
  • Makeup, Hair, and Nails: This is another one of those expenses that can cost as little as $100 and as much as $3,000 depending on the size of your bridal party. 
  • Thank You Cards: This will run you about $90. Don’t forget to send out the thank you cards and thank your guests for attending the wedding and the beautiful gifts. 
  • Honeymoon: If you want to go overseas, your honeymoon may cost a bit more, but if you’re saying domestic, you will probably spend about $2,000. Other honeymoons can run as much as $7,000 on average. 
  • Remember you need to tip the servers, your hair stylist, the DJ, and your bartender.

If you’re having an outdoor wedding in a non-traditional location like a barn or backyard, you’ll want to consider other expenses. Some of these include lighting, travel, a tent, a backup venue in case it rains. You may have small expenses including a website, bug spray, sunblock, fans,

7. How Will an Unsecured Loan Affect My Credit Score?

This is a great question. Whether you’re on your second marriage or you’re a young couple, you will want to be aware of your credit score, and how taking out debt can affect it. An unsecured personal loan can improve your bad credit score or make a good credit score better.

One thing your FICO credit score takes into account is how many types of debt you can consistently repay. A personal loan can improve your score because it demonstrates that you can handle multiple types of debt. And the monthly payments can be easier to budget for when compared to credit card debt.

First, a personal unsecured loan for your wedding can improve your credit score and your spouse’s. If you co-sign, you can both commit to repaying the debt and benefit from have a wider range of loan types. Just be sure you repay your debt on time and in full according to your terms.

8. How Does Your Credit Score Affect Your Wedding Loan?

Your credit score shows lenders a history of how likely you are to repay your loan. They call this “creditworthiness.” The higher your credit score, the more creditworthy you are. The lower your credit score the riskier you appear to lenders, but you can still find a bad credit loan that will work for you.

Some of the benefits a person with good credit can take advantage of when it comes to finding a great loan are the lower interest rates and a higher loan amount. This is because lenders trust people with good credit scores to repay their loans.

A bad credit doesn’t mean you’ve been irresponsible. In fact, many people with low credit scores don’t have very long histories of borrowing money. Many people don’t understand how the credit system works, so they believe that not taking out any loans or opening any lines of credit will improve their credit scores. This actually has the opposite effect because lenders do not know how likely these people are to repay their debt. They have no history to demonstrate their repayment habits.

If you do have a bad credit score, you can improve it by diversifying your debt to include an unsecured personal loan. You can also consolidate your debt into one payment to make it more manageable to improve your repayment habits over time.

9. How Do I Find an Unsecured Personal Loan for My Wedding?

There will be numerous options out there for finding a loan, but you want to know what you’re looking for in a loan before committing to the first lender you find.

Different lenders will offer you different interest rates and loan terms. Loan terms are the amount of time you agree to pay the loan back within and your monthly payment amount. You will want to figure out if you’re able to repay your loan quicker or you need more time and which option will save you the most money in the long run. For example, a shorter loan with a higher interest rate can save you money because you’re charged interest for a shorter period of time.

You should also prepare all of your documents before you look for a lender to make the process easier. You will want to provide potential lenders with:

• A valid ID
• Tax returns or pay stubs
• Proof of residency
• Employer contact information

You may be asked for other documents depending on the lender.

10. Should I Borrow a Little Extra Just in Case?

Many brides ask this question. If you’re taking out an unsecured personal loan for your wedding, you want to stick to your budget as closely as possible, but you may want to borrow just a little extra in case something pops up. Many brides forget to budget for tips, programs, and small things like breakfast for the bridal party.

You will want to make sure you borrow enough to cover incidental costs, but still be able to comfortably and consistently repay your loan.