Weddings mark the beginning of a new chapter, a moment when two individuals stand together and profess their everlasting love for each other. Despite the significance of the event, weddings undoubtedly incur significant costs, whether it be venue deposits or catering expenses. Which is why many couples find themselves agonising over whether to take out a loan to finance their wedding costs.
As the saying goes: to be prepared is half the victory, so in this article, we’ll explore some of the advantages and disadvantages of taking out a wedding loan to help couples make an informed decision about whether this is the right course of action to take.
The first major advantage of a wedding loan is probably the main reason that couples choose to take one: less financial stress during the lead-up to the event.
Though a wedding is, of course, a happy event, the process of planning one and turning it into reality can sometimes be a nightmare. Between the guest list, venue preparations, catering, decorations, ceremonial matters, and a million other things, a couple is already likely to be highly stressed. Why add money worries on top of that?
A wedding loan allows the couple to focus on the other parts of the wedding. And once the main event is over, the newlyweds can begin the process of paying back the wedding loan. If they work together, stick to a predetermined plan, and choose a suitable lender, then repayment of the loan shouldn’t be too difficult.
Given that wedding loans are generally unsecured, couples won’t have to put any of their assets as collateral for the loan. This is an advantage for borrowers as they avoid risking valuable assets. In addition, the lack of collateral will also make the loan application process go faster because the valuation of the assets is unneeded.
If all goes well with your wedding loan application, you could have your funds in as short as 24 hours.
As with any type of loan, you should only take up a wedding loan if you are completely sure that you can meet the monthly payments.
Making your monthly repayments on time and in full will slowly build up and improve your credit score. In turn, this could make it easier for you to obtain other loans in the future since lenders will see that you are reliable in repaying what you have borrowed.
It’s a virtuous cycle that keeps getting better and better as long as you make your monthly payments promptly. Take advantage of our loan calculator to get a quick estimate of what your monthly payments (plus interest) will look like if you are considering taking up a wedding loan.
A unique advantage when it comes to wedding loans, compared to other types of loans, is that spouses can help each other with the repayment of the loan.
While a joint-personal loan is not common in Singapore, each partner can take up a personal loan on their own. The total loan amount is capped at 4x monthly income (for banks) and 6x monthly income (for moneylenders). A good balance is to borrow no more than 6 months of your monthly income individually.
Like many other loan products today, a good credit score plays a large role in the success of a loan application. This means that couples with less-than-stellar credit scores might find it difficult to secure a loan. It’s possible to find lenders that can offer loans with bad credit, but the trade-off (besides the difficulty of actually finding them) is reflected in higher interest rates and lower loan amounts.
If you find yourself in a situation like this, consider submitting your application on our platform. Instead of scouring the web for the best deals and sending out dozens of applications, with Lendingpot, all it takes is one application to receive several offers.
While wedding costs make it easy to realise a dream wedding. It also means that a couple begins their life together in debt.
In addition to the financial burden of monthly repayments, it can affect a couple’s ability to acquire other loans. Banks and other financial institutions will be less keen on granting loans to individuals with ongoing loan repayments.
If you’ve decided to take out a wedding loan, it helps to find the best possible lender to minimise the impact it may place on your financial health.
This is our specialty. Lendingpot is a digital application designed to empower borrowers to obtain the best loans for their needs. With a single application, you can receive multiple offers from lenders on our platform - all competing to offer you the most attractive loan. That’s why our clients love us – we put the power and leverage in their hands.
Best of all, this service is free for borrowers. Too good to be true? Don’t worry. Your success is our success. Our partner banks and moneylenders pay us a modest service charge when borrowers use our services.
Learn more about our story and our values, or visit our blog for tips and tricks on how to take back control of your finances. We have everything from guides to wedding financing to tips for checking your personal financial health.
As ever, we remain committed to helping individuals get the best outcomes in approvals and pricing.
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