Should you take out a personal loan for your wedding?

Your wedding day has been set and you know exactly how you want this day to go. From the flowers running down the aisle, to the adorable costume of the ring bearer, you have it all planned out.

However, in all the excitement, you might not have spent as much time thinking about the costs. We have a look at whether a loan could be an option, how to take one out responsibly, and what alternatives you have.

Tip: You can easily apply for a personal loan by going to this page.

Should you take out a loan for your wedding?  

“Personally, I would not recommend taking out a loan for a wedding,” says Lindie van Gass, certified financial planner and blogger at Bank Beter.

She explains that you should only use debt to buy assets, such as a house, and that a wedding is a luxury purchase that will not increase your long-term wealth.

Sheila-Ann Robey, financial adviser at Lifeguards, an affiliate of Liberty, says that taking on debt is always something she would advise her clients against.

“This is especially the case when it comes to their weddings, as the added burden of financial stress on newlyweds is real,” says Robey.

How can you do this responsibly?

Robey says that taking on debt for a wedding is no different from taking out a personal loan for any other expense. If this is unavoidable, Robey advises clients as follows:

• Know how much you need. A wedding budget is crucial to alleviate the management of the debt.
• Shop around with financial institutions to determine who will offer the lowest interest rate. Read all the fine print in terms of loan repayment terms and fees. Make sure you can afford the monthly loan repayment.
• Make sure to attend to your loan repayments timeously and add any extra payments before the day the financial institution charges you interest. The interest is charged on the outstanding capital, so if you are adding additional payments, you reduce the outstanding capital and your interest charge will be lower.
• It is advisable to take the loan on the most favourable credit score between you and your fiancé. However, you must both agree on how to attend to the repayments. It must also be mentioned that your marital regime is relevant when it comes to debt, and regardless of who took the loan out, if married in community of property, both parties will be liable.
• Always consult your financial advisor before entering into any credit agreements. Their input and guidance may make a world of difference at the beginning of your marriage.

What alternatives are there?

“As soon as my clients even think about getting engaged or married, I will assist them with planning for wedding expenses. A wedding does not have to be a costly and stressful affair,” says Robey.

“Proper planning will allow you to have the wedding of your dreams without having sleepless nights wondering how you will pay for it.”

Below are some of the tips and tools Robey offers to her soon-to-be-wed clients:

• Work out a budget for the wedding. Know exactly, to the cent, how much you need
• Calculate the amount you have saved already and find out how much, if anything, your family is willing to contribute.
• Consider how much more you can save on a monthly basis before the big day, and how this will impact what you need for wedding costs.
• Once you know how much you need and how much you have, you must calculate your shortfall, if any.
• Reconsider your weddings expenses and see where you can save and reduce costs, whether through a smaller guest list or alternatives to flowers, or a cash bar instead of an open bar.
• Negotiate with suppliers and get assistance from a wedding planner or coordinator to do the harder work for you.
• Remember that the day is about you as a couple and not keeping up with the Joneses. Where your heart goes, your money follows, so ensure that your wedding is a reflection of you as a couple.

Ramona Singh, administration director and registered debt counsellor at Infinite Life, says that personal loans are very tempting to take out.

“Be cautious that you’re not trying to fill the void at present without thinking about the future. Decide carefully, and discuss it with your new life partner so that you make the right decision,” says Singh.

Struggling to meet your financial obligations? Consider debt consolidation today.