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Can I use a personal loan to finance my wedding?

personal loan - finance weddingpersonal loan - finance wedding
personal loan - finance weddingpersonal loan - finance wedding

 

Can I use a personal loan to finance my wedding?

Planning a wedding is one of the most fun, exciting and stressful times in a young couple’s life. There is the guest list to consider, the seating plan to finalise, the decor to consider and – of course – the dress to choose.

However, all of these romantic aspects cost money and often the price tag of a dream wedding ends up being more than either the bride or groom ever imagined.

In order to finance a wedding, many couples borrow money from parents, grandparents and even charitable aunts and uncles. But starting your life together with familial debt is not ideal, which is why you should consider taking out a personal loan to finance your wedding.

Steps to take for a personal loan

Applying for a personal loan in order to finance your wedding is the same application process as any other personal loan, aside from the fact that it is for a highly exciting event.

There are some steps you can take to prepare yourself for applying for a personal loan, one of which is to use a personal loans calculator to assess whether or not you will be able to afford a personal loan or how much you are able to apply for.

Consider your costs before applying

It is vital to work out a budget before you apply for any personal loans as this will help you to accurately ascertain how much you are going to need to borrow. However, you will need to be realistic and willing to compromise – do you really need a horse and carriage entrance if it’s going to cost R10 000 alone?

Some of the major and most important costs include venue hire, food and drinks, as well as photography costs, and all outfits for the day. Good practice is to leave at least 15% unspent to make up for unexpected costs.

Using a personal loans calculator to determine how much you can afford to borrow will help you to stick to your budget, which will ultimately contribute to a brighter future as you will not be in debt that you cannot afford to repay.

What requirements you need to meet

As with any personal loan, a personal loan for wedding finance has certain requirements that you will need to meet, namely:

  • A regular monthly income of at least R5 000.
  • A clear credit record.
  • Your last three months' payslips or bank statements.
  • A clear copy of your ID document.
  • Details of your bank account into which your salary is paid.
  • A recent document confirming your residential address.

Once you have submitted these documents and filled in the online form, you will hear from your bank shortly with a response. Be sure to disclose all credit history to your bank because they will do a credit history check and if you are unable to explain a negative result, the likelihood of receiving the loan becomes uncertain.

Secured vs. unsecured loans: which to choose

A secured loan is a loan which is secured by an asset you have, such as a house or a car. If you fail to repay the loan, your bank or lender can sell the asset to recoup the money they are owed. Secured loans usually have a much lower interest rate due to being lower-risk for the bank, but it is a higher risk choice for the borrower.

An unsecured loan is not secured by an asset and, because of this, the interest rates are usually much higher. However, you will not risk losing any assets, so for a couple who is just starting out, it may be a more appropriate choice.

Create a solid repayment strategy

It may not seem like the most romantic way to spend your time with your new spouse, but it is vital to create and implement a solid repayment plan for your loan. After using the personal loans calculator to assess how much you can afford to borrow, you will be able to work out how much you will have to pay back monthly.

This will help each of you ascertain how much you are able to contribute to the monthly repayments and how quickly you will be able to repay the loan.

You can go the nontraditional route of asking for monetary gifts at your wedding instead of asking for toasters, crockery and cutlery, and use some of the money raised from the wedding to pay back some of your loan, while using the rest for a dream honeymoon.

Why wait for your wedding bells to ring?

A personal loan is a highly viable option for financing a wedding, especially if there is no help available from either family’s side due to financial constraints. While it may not feel like a romantic option, planning your finances before the big day will solidify your married life even more. Personal loans are no longer risky options for young couples as they previously were and many banks offer highly affordable options. After all, your wedding day cannot wait forever.

 

personal loan - finance wedding