wedding financing

Tips for Financing Your Wedding with Bad Credit

Financing your wedding is tough, but it can be even more challenging if you have bad credit. Getting store credit cards are almost impossible, but don’t worry! There are other ways that you can finance your wedding even though your credit score isn’t top-notch. Here are three ways you can explore to get that perfect, dream wedding.

Wedding Loan

Getting a wedding loan is a great option for many people who are having trouble financing their wedding. There are many websites that offer these types of loans such as MyWeddingLoans and LightStream. The way wedding loans work aren’t as mysterious as you may think. They’re simply personal loans that are used solely for the purpose of your wedding.

Interest rates for wedding loans aren’t as bad as you’d think and start as low as 5.99%. Additionally, you don’t need to put any collateral with your loan, which is great if you don’t own a home. While you can’t go into your local bank and ask for a wedding loan, you may be able to get a personal loan.

The downfall is the higher your credit score, the lower your interest rate. If you have a really low credit score, you’re more-than-likely going to have a high-interest rate. This means that you’ll end up paying more money once the loan is ultimately paid off. So take for example if you have a $25,000 with a 48-month term and 9.44% interest, the total cost of your loan will cost $30,114 in the end. That’s an extra $5,114 that you can add to the cost of your wedding.

Home Equity Loan

If you do own a home, you’re sitting on a possible line of credit. A home equity loan is similar to a credit card, but you’ll use the value that has built up in your home. This type of loan is referred to as a “secured loan,” since it is backed by your house. The interest rates for a home equity loan are lower than a wedding loan, but the risk is much higher.

If you are unable to pay the loan and you default, there is a possibility that you’ll lose your home. If you do choose to get a home equity loan, it’s important to borrow only what you absolutely need so you can pay it off as quickly as possible. Paying off this loan may seem more realistic since the interest rates are much lower. Be sure to shop around, since many banks don’t offer home equity loans. A great place to look is credit unions because they often offer better interest rates when compared to banks.

Borrowing From Family

When it comes to borrowing money, no one ever wants to ask their family. Asking for money has always been a taboo subject, but if you have bad credit, it may be one of the only ways to finance your wedding. Ask for cash instead of gifts for the wedding or even set up a registry to make paying cash easier. Websites like OurWishingWell allow you to create a website for your wedding where you can invite guests, request cash or traditional gifts, and many more things.

Last Updated: May 17, 2016