Wedding Loans: Why More Couples Are Turning To Personal Finance For Their Big Day
Whether you and your partner have already tied the knot, or you’ve just popped, or been popped the question, chances are you’re already very familiar with the mounting costs of a wedding. In the UK alone, the average cost of a wedding can top £31,900, with these figures growing with every passing year – and that isn’t including beauty-related spending!
With such a whopping price tag on your big day, is it really such a wonder that more and more couples are turning to loans as a financial solution? With the rise in wedding loans available, even couples who are a little harder for cash are applying for online loans. The question is, why? And are they a good idea for any couple planning their big day?
A Growing Trend
With at least a 114% increase in wedding costs year-on-year, the average price is quickly stretching far beyond the average budget in the UK. Very few households have savings over £1000 and so even when you cut down the wedding plans to the bare basics, affording your big day isn’t as simple as saving up for the year. For this reason, it’s clear why wedding loans have become a trend.
Couples are becoming more and more focused on providing an incredible experience for not only themselves, but for their guests, and so the expenditure relating to food, drink, entertainment, the venue and even accommodation for guests is on the rise, sending wedding costs skyrocketing beyond their means.
Wedding loans, however, are considered to be an alternative to high street credit cards, with more stable interest rates and, therefore, an equally as stable repayment plan. For this reason, those who take out wedding loans are said to default 12% less than those with debt consolidation loans, and 20% less than borrowers who took out a loan to make a big purchase. Whether this is due to better planning or the ‘major turning point’ that a wedding provides for couples, wedding loans are perhaps one of the safest monetary moves a couple can make early on in their relationship.
What Is Wedding Finance?
Wedding finance, or a wedding loan, is not too different from any other personal loan. You still apply in the same way as any other credit or loan option, and acceptance will usually occur within 48 hours in most cases. These loans are also unsecured, meaning that you won’t need to offer any collateral in order to take out the loan, giving you peace of mind that your most valuable assets are safe.
These loans are designed to cover the costs of a wedding, and the amount you need will ultimately depend on the wedding that you want. In some cases, you may want to use these loans as additional money onto an existing fund, while others might need to rely entirely on the money they receive from the loan. Deciding whether you want or can afford to take out a wedding loan will depend on your means, and should be discussed at length with your partner before application.
What Is The Average Cost Of A Wedding?
As mentioned before, the average cost of a wedding can be up to an eye-watering £31,900, with this figure set to increase over the next 12 months. This average is made up of countless elements, with some of the biggest costs coming in the form of venue hire, the honeymoon, the food and drink, and the wedding dress. Surprisingly, photography, engagement rings and a mini-moon are also considerably high bills that couples are footing, even when they’re working on a budget.
Hen/Stag Parties - £400-600
Before your big day even arrives, you’ll probably want to head out on a hen or stag do with your closest family and friends. Stag parties are considered to be slightly cheaper at an industry average of around £400, while a hen party will set you back up to £600 depending on what you do and when!
Venue hire – £5,406
The wedding venue can be one of the highest costs you’ll face when it comes to your big day. While it can work out a little cheaper to hire a venue that will act as the location for both the ceremony and reception, couples can still expect to pay upwards of £5,000 for their dream venue. Cheaper alternatives can be found if you book up to, or over a year in advance, but could still set you back a few thousand.
Food – £3,887
The costs you’ll face for catering can make you feel like you’re feeding the 5,000 – if you book catering that offers a three-course meal and drinks for your guests, you can expect to pay up to or above £3,887 on average for the privilege. You can find more cost-effective options such as buffet tables, but the amount you’ll pay for food regardless will ultimately depend on how many guests you’ll be feeding!
Drink – £1,587
When it comes to drinks, you have two options – one, provide drinks for your guests and/or put money behind the bar, or let them purchase their own if the venue offers an operating bar. In order to cut costs, more and more couples are opting for the latter but for those with bar-less venues, you can expect to pay an average of £1,587 to cover drinks for all of your guests. This, as with food, will depend on how many guests you have.
Wedding Dress – £1,313
There’s a dress out there for every bride and while some have more expensive taste than others, the industry average for a wedding dress is £1,313. You can find more cost-effective dresses to reduce that cost, however, without having to compromise on the beauty and often the quality of the dress.
Groom’s Suit - £453
A Groom’s suit is considerably more cost-friendly than a wedding dress, the still eye-watering cost of £453 isn’t something everyone can afford to shell out from our pockets. This cost does include the suit, tie and cufflinks, but even these can add up the cost beyond this point.
Bridesmaid Dresses - £340
The cost of bridesmaid dresses will ultimately depend on how many bridesmaids you have, but the average in 2019 seemed to be approximately £340. Again, this is another cost you can often cut down if you shop around but be prepared to pay this regardless.
Entertainment/music – £1,005
In line with our previous statement that couples are wanting to provide an amazing experience for their guests, entertainment and music costs are one of the highest you’ll need to foot according to the market average. Couples are spending over £1,000 on entertainment alone, whether that’s a DJ, a band, or even both.
Photography – £1,155
If you’re hiring a photographer, you could be paying anything between £900-1155 according to the industry average. You may be able to hire a photographer for cheaper if you aren’t set on having them around for the whole day, or if you book far enough in advance.
Accommodation - £820
Thinking about providing accommodation for your family and friends for the night? You can be looking to pay £820 on average, and that’s if you’re nowhere near a city! Consider group bookings or hiring a venue that offers accommodation for a certain number of guests accordingly.
Honeymoon – £4,645
The honeymoon isn’t always considered to be a wedding cost, but it is one of the highest costs you’ll face if you’re planning to go on one. While you might’ve nabbed a great deal on flights and accommodation, the food, drink, celebrations and bits and pieces here and there on top can boost your honeymoon to an average of £4,645.
Mini-moon – £5,500
Believe it or not, the cost of a mini-moon is actually considered to be higher than a full honeymoon! These miniature escapes are best for couples with busy lifestyles but won’t save you much in terms of costs!
These are countless other costs to consider too, from the wedding rings to the cost of favours and gifts for the bridesmaids and ushers. The cost of your wedding will ultimately depend on the budget you’re willing to follow but regardless, it can be a cost most of us aren’t able to foot alone.
Advantages Of A Wedding Loan
While industry gurus will suggest saving up and waiting until you canafford your wedding without the help of a loan, this isn’t always a feasible option for every couple. If you don’t have the cash you need at this exact moment but will be able to repay the costs over a longer period of time, a wedding loan could be an option if you’re eager to get married for whatever reason you have. If you do choose to take out a wedding loan, you will be able to benefit from cheaper interest rates than credit cards will offer, and are considered to be a safer bet in general. Personal loans, regardless of their intended use, are often used for debt consolidation for this reason, and so may be a more cost-effective alternative for couples.
A personal loan can also help to strengthen your credit score and for couples just getting started together financially, this can be a great way to boost your credit score ahead of things like taking out a mortgage on a home. If you can maintain the loan repayment periods on time and in full, you and your partner (if taking out a joint wedding loan) can benefit from an improved credit score.
What You Need To Be Careful Of
As with all loans, there are a number of things you need to be careful of. Wedding finance is still a form of loan that can harm your credit score if you are unable to make the payments on time and the monthly repayments you need to make to the loan could harm your ability to save simply due to a lack of funds from which to do so. This will depend on your joint income as a couple but is something worth considering.
It’s also worth considering that you may be tempted to spend more on your wedding when you start applying for the loan, so it’s important to ensure you calculate the amount you’re likely to need and only borrow that amount. Similarly, if you do end up borrowing more than you need, check to see if you can repay the amount you have leftover early without any penalties or extra fees. This will ensure that you don’t spend the amount and can reduce the monthly repayments or loan term that you have left.
Is A Wedding Loan Right For Me?
Deciding if you need a wedding loan will depend on your own financial and social situation. If you know that you will be able to comfortably meet the repayment criteria from a loan, but don’t have the savings set aside to pay for a wedding upfront now, a wedding loan could offer you the cash you need to be more flexible with what you’re booking or ordering. If you feel that you might struggle with the repayments, however, a wedding loan should be avoided and alternative finance or financial help should be sourced.
You could opt to budget and save rather than take out a loan, particularly if you haven’t booked anything yet and are just getting started with the booking. In some cases, you might be able to book a venue in advance with just a deposit, then save up the costs for the rest over the time between the booking and your big day. You could ask family and friends for help with the wedding costs too, or even set up crowdfunding as a wedding gift option that your family and friends could opt for to help you out.
You should also consider if anyone you know has the facilities or skills to cut out one of the outgoing costs of a wedding. Do you have a friend who is handy with a camera? You can cut out the cost of a photographer. Do you know someone with a large home or garden that could be used for a venue, or who works somewhere that might offer a discount? This could also save money. You could even shell out catering responsibilities, whether that’s making the wedding cake or putting together a buffet, in order to cut down the costs of catering.
The huge cost of a wedding is no secret and while a budget-friendly big day is possible, you still need to foot some eye-watering bills. Wedding loans can offer a finance option that helps you spread out the cost over a given period of time. Providing you are in a strong financial state, wedding finance could be the cash injection your big day needs. Take care with how much you’re borrowing and spending, and you could be well on your way to a comfortable, memorable big day without the stress of money.
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