It’s true: weddings are expensive! The average cost of a wedding in 2019 is over $28,000, and that figure doesn’t even include the honeymoon. If you’re looking for ways to finance your big day, there are several loan options available—personal loans, credit card loans, HELOCs, LOCs and 401(k) loans. Each type has its pros and cons, so let’s take a look at each one:
Personal loans: The most popular way to finance a wedding
The most common way to finance a wedding is by taking out a personal loan. Personal loans for wedding expenses can be done through various lenders, including banks and credit unions, but the best way to find one is through various online comparison sites. These sites allow you to compare rates from hundreds of lenders across the country. You can then apply for a loan online and get it funded quickly.
Personal loans are also easy to get approved for because they are much less stringent than other types of financing used for weddings. Most lenders will lend up to $40 grand without income verification or proof of employment—which means that even if you’re unemployed you’ll still be able to borrow money from them!
Another benefit of personal loans is their low interest rates—as low as 4%, making this one of the cheapest ways to fund your wedding! According to financial advisors like Lantern by SoFi, ”Wedding personal loans can range anywhere from a few thousand dollars to $100,000, depending on the lender and your eligibility as a borrower.”
Credit card loans: A natural choice for small-scale weddings
If you’re planning a smaller wedding and you have a good credit score, getting a credit card loan to cover your wedding expenses is an easy choice.
Credit card loans are quick to apply for—you can do it online in just minutes—and easy to get approved for because of the low interest rates that many credit cards offer. You can use your card loan for any wedding expense, including clothing, decorations and flowers.
Wedding credit cards: A new option for people who aren’t yet married
Wedding credit cards are a new option for people who aren’t yet married. You can use the card to pay for your wedding, your honeymoon and even the reception.
Home equity loans and home equity lines of credit (HELOCs): Not your typical wedding funding options
If you have good credit and enough equity in your home, these mortgages might be a good option for you. With a HELOC, you can borrow up to 80% of the value of your house. That’s more than what you’d get with a loan. They can also be useful if you want to take out several small loans over time instead of one large one.
However, if something happens and things don’t work out as planned, a home equity loan could end up costing more than it should have by increasing its interest rate when it refinances itself. Also, keep in mind that these types of loans are considered risky; some people may not qualify for them at all because their income isn’t high enough or their debt-to-income ratio is too high.
And that’s just a sampling of the different types of loans you can use to fund your wedding. No matter what your financial situation is, there’s probably a loan that will work for you. Do talk to a lender about the different options and see which one makes sense for your particular needs.