A wedding should be one of the happiest days of your life, and with the venues, themes and styles of ceremony becoming more and more extraordinary, your perfect day can seem out of reach. A wedding loan is taken out to make sure that you and your partner can achieve the dream day that you crave, at a cost you can afford. The best thing to do when planning your wedding is to first set a budget, and stick to it. Begin by listing the essentials, such as the venue, dress and rings and use that as a start to build on additional extras to personalise your day. Don’t forget to factor in your honeymoon; some people take out a wedding loan to cover the cost of the honeymoon so that the couple don’t need to worry about money on their relaxing holiday.
Types of wedding loans:
Wedding loans can be taken in a variety of forms, but borrowers must remember to apply for only what they can afford to pay back. It is not a good idea to begin married life in huge amounts of debt or financial difficulty.
An unsecured wedding loan is usually a fixed rate loan of between £1000 and £25,000 and is best for those who are not yet homeowners, or are in negative equity with their property. Preferential rates for this type of loan will be reserved for couples with good credit ratings, have lived at the same address for a long time, have job security and a good relationship with their bank. An advantage of the personal loan fixed rate is that the repayments will stay the same, which will help with household budgeting.
Second Charge Mortgage
Homeowners may wish to secure their wedding loan against their property. By securing the borrowing against an asset, a greater amount can be borrowed, and repaid over a longer period. Because of this, the monthly repayments will be less, although the overall interest paid may be greater than a personal loan. The main disadvantage is that your home is at risk should you fail to make the repayments.
Peer to peer lending
Another option for a wedding loan is to consider peer-to-peer lending. Savers use peer-to-peer lending because it often offers more preferable rates than a high street bank, which in turn leads to improved interest rates for the borrowers. Companies such as Ratesetter and Zopa are examples of these online borrowing sites. They work in a similar way to a broker and take a fee for setting up a suitable lender/borrower relationships. This type of borrowing is only accessible to those with a good credit history. It is always advisable to check the terms offered by each peer-to-peer site before accepting an agreement. With so many options available, obtaining a wedding loan can seem as overwhelming as the day itself, which is why Freedom Finance is a great first step. Our footprint free soft search tool allows potential borrowers to obtain accurate quotes based on individual circumstances. Freedom Finance aims to protect their customer’s credit rating by marking the file only when a formal application is made, which is based on individual criteria, reducing the risk of any future difficulty obtaining credit as Mr and Mrs!