You may be familiar with home loans, car loans, and even student loans.
But a wedding loan? Is that even a thing?
It is. Traditional weddings are hugely expensive and, with couples waiting later in life to tie the knot, many brides' parents are ignoring the tradition of paying for a daughter's wedding.
So if the young couple wants a big wedding, they have to come up with the big check.
If you Google “wedding loan” you will find no shortage of lenders willing to finance the big event. For example, SAFE Credit Union says its wedding loans “are designed to help relieve the stress that comes with wedding and honeymoon expenses. With an unsecured Wedding Loan, you can buy what you need now for the big day and pay off the balance with flexible terms.”
About the same as a credit card
Couples can borrow up to $10,000 with up to three years to repay. Interest rates vary between 9.9% and 17.90% – about the same as credit card interest.
In a report on the rise of wedding loans, Credit.com notes that there is nothing that separates a wedding loan from any other type of personal loan. They can range from as little as $2,000 to as much as $35,000.
But are they even remotely a good idea? In weighing the pros and cons, the Credit.com report suggested couples could get the wedding of their dreams without having to empty their savings.
Maybe, but the debt doesn't magically disappear after the honeymoon. It has to be repaid, and if one or both of the new spouses have student loans – well, that's a lot of debt.
Bruce McClary, spokesman for the National Foundation for Credit Counseling, says starting life together by going into debt to pay for a one-day event is not exactly getting off on the right foot.
Source of tension
“Debt is a significant source of tension for many couples and can be even more toxic when there is lingering regret about overspending for a wedding,” McClary told ConsumerAffairs. “Building equity in the relationship can be accomplished without going deeper in debt.”
Financial website TheStreet.com is even more blunt, calling a wedding loan "the biggest financial mistake a couple can make."
An alternative is to find creative ways to get married without running up a huge bill. That's not always easy, since anything having to do with weddings seems to add a hefty sum to the bill.
According to Money Crashers, the average U.S. wedding now costs around $20,000, but there are plenty of cheaper alternatives. Among it's budget-cutting tips – don't get married on a Saturday. Wedding venues and services charge a premium on that day.
Find other money-saving tips for weddings here.