If you're getting married in the near future, you know a few things to be true: You're obviously going to look like a million bucks on the big day, you're destined to have at least one wedding planning breakdown (we hate to break it to you), and, most discouraging of all, you're probably going to blow a lot of dough. Wedding budgets vary by couple, with some wedding costs skyrocketing into the tens of thousands of dollars (👀). Naturally, you and your future spouse may need a helping hand in the financial department to pull off your dream wedding, and you're not alone—personal finance comparison website Finder.com discovered that 1.13 million American adults borrowed money last year to foot their wedding bills. But what exactly is the best way to go about loaning money for your wedding?
According to Finder.com, the 80 percent of Americans who borrowed money to specifically cover wedding costs last year massed up a total of $3.48 billion, with couples averaging $3,082. Of this percentage, most American couples turned to credit cards or personal loans to help finance their nuptials. Finder's study also noted that almost one in five married duos loaned cash from family or friends.
"When it comes to financing one’s wedding, it’s important to not only analyze your ability to pay back your loan, but to also to determine any ways you can cut costs while still having a special experience," says Finder's Consumer Advocate, Jennifer McDermott. "Since all loan terms vary greatly, it’s important to assess APRs and agree upon a reasonable average loan repayment period. Once repayment begins, you will be responsible for the principal cost of the loans and the interest its accumulated. Remember, one happy day is not worth years of financial stress."
If you're planning to finance your wedding, consider the loan repayment period and interest rates when determining the best route for you and your partner. According to Finder's results, taking out a payday loan is the most frugal option, but this advance often involves high interest rates and a two week repayment time span. Otherwise, consider taking out a personal loan, which has an average loan term of 24 months and an interest rate of 10.57 percent.
Credit cards and peer-to-peer loans are also viable financing options. According to Finder, peer-to-peer lending features the longest repayment period (averaging 38 months), and an interest rate of about 18.01 percent. Credit cards similarly have an 18.62 percent interest rate, but a much shorter loan term—13 months.
As uncomfortable as money talk may feel, this is one pre-wedding convo that you and your S.O. definitely need to have. And, don't feel ashamed if you've maxed out your wedding budget or need a little extra help—quite literally billions of other people are in your shoes, and you have plenty of financial options.