Tying the knot is one of the most exciting times in a couple’s life. But, your big day comes with some big choices — and big price tags to match!
If you’ve been putting together your wedding budget and are concerned that you won’t have the funds sitting around to make your dream day come true, then a wedding loan might be the answer.
If you or your wedded partner-to-be have poor credit, a wedding loan doesn’t need to be off the cards. Our below guide explains how you can get a wedding loan with bad credit.
Just because your credit has taken a hit in the past doesn’t mean it should impact your future!
If you have a bad credit score, it’s possible to get a wedding loan with bad credit.
What are wedding loans?
Wedding loans are a type of personal loan that is designed to provide you with the funds you need to cover the costs involved with your wedding. Wedding loans are typically a form of unsecured personal loan, which means that you have the flexibility to use the funds to cover a range of different wedding-related expenses. This can be particularly useful to secure your ideal wedding venue, or proceed with confidence when you finally find your dream suit or dress.
Some of the other wedding costs that you can use a wedding loan for include:
- Your wedding photographer
- Catering
- Wedding rings
- The wedding dress or suits
- Accommodation
- Your wedding car or other transport (such as shuttling guests from the ceremony to the reception)
Top Tip
Some couples prefer to request no presents, and instead, have a box or wishing well on their wedding day for guests to contribute to the newlywed’s future. While this money generally gets put to the honeymoon, you could use any monetary gifts to help repay your wedding loan and start your married life together with slightly less debt!
How can I get a personal loan for my dream wedding if I have bad credit?
Getting approved for personal loans can be tricky when you have a low credit score (or no credit history). Thankfully, you don’t necessarily need a good credit history to be approved for a wedding loan, however, you do need to conduct your due diligence and take extra steps to improve your chances of accessing the finance you need for your big day. A seamless wedding day takes much planning and consideration, so putting that same planning and consideration into your finances before applying can also help with a seamless wedding loan experience.
Understand your credit score
First things first, it’s important to understand what has caused your low credit score. Sometimes, people who’ve never borrowed money before can have a low credit score simply because they’ve never been able to demonstrate their diligence around repaying loans. However, if your bad credit history has been caused by irresponsible financial practice, accessing a copy of your credit report is a great option so that you know exactly what your score is, what has led to your bad credit history, and so that you know what to avoid in the future.
You can access a free copy of your credit report once every three months from one of the major credit reporting bureaus in Australia.
Practice sound financial management before you apply
Unsecured personal loans are typically higher risk for lenders than a secured loan. Due to wedding loans being a form of unsecured loan, it makes even more sense for couples with a poor credit rating to improve their financial management before they apply for an unsecured personal loan.
Lenders are likely to look at your bank statements to verify your income and spending habits when applying for a loan, to make sure that you can comfortably afford your loan repayments. They will also like to see recent statements from any existing car loans, personal loans or credit cards. This is why it’s so important to ensure that you are keeping on top of your bills, expenses and other financial commitments in the lead-up to applying for a personal loan.
Ensuring that your bank account doesn’t become overdrawn, paying bills through direct debit and putting a small amount of money aside each week, fortnight, or month can all help demonstrate your credit worthiness, and also kick start healthy finance habits that can improve your credit rating.
Know your budget
When we talk about knowing your budget, we mean for both your wedding and your personal loan. In fact, if you know how much you can realistically borrow, say through using a personal loan calculator, you can then have a guide as to how much you can realistically afford for your wedding. By the same token, knowing what you want to spend on your wedding can help you narrow down your desired loan amount for when you look to apply.
The beauty of using a calculator with indicative interest rates is that you can get a feel for what your repayment amount may be at other loan amounts. For example, you may look at the difference in monthly repayments between a $10,000 and $20,000 loan and then reassess your wedding budget, based on your affordability.
Consider your time frame
As one of the most exciting times in your life, it’s completely understandable that you may want to get married as soon as possible. However, one way that you can help get approved for a wedding loan is to reconsider your time frame.
By pushing out your wedding date, you give yourself and your partner time to save more money and also improve your credit rating before applying.
Research specialist lenders who offer personal loans for bad credit borrowers
There is no point going through the full application process, only to find out that you don’t pass the credit assessment. Not only is this wasted time and effort, but a failed credit check can negatively impact an already low credit score.
Before you apply for a personal loan, it pays to look at your options — not every financing option will be tailored for applicants with bad credit. Sourcing a bad credit lender and working with them to source the best solution for you can be the difference between being turned away, and having your loan approved.
Did you know?
A joint application could be stronger than only one member of the couple applying, as both incomes will be used to support the loan application.
More to know about wedding loans
If you have more questions on wedding loans, then we have more answers. Keep reading as we go over some information on wedding loans.
Are wedding loans better than using a credit card?
It can be tempting to start putting wedding expenses on the credit card, particularly if they’re smaller items, such as finding just the right hair piece, or if a pair of shoes goes on sale. However, small items can quickly add up, and it can be easy to go over budget unless you’re meticulously watching every dollar that’s being spent.
One of the benefits of taking out a wedding loan is that it can help couples avoid going into debt on their credit cards. Credit card interest rates can be very high, and it can be difficult to pay off the balance when the interest is compounding. By taking out a wedding loan with a lower interest rate and longer loan term, couples can save money on interest and make their payments more manageable.
Top Tip
By keeping up with your personal loan repayments, you can actually help to improve your credit profile over time.
Interest rates
Interest rates vary, depending on your personal situation and the market rate at the time you apply. To get a personalised rate, we generally need to assess your personal and financial circumstances first. Talk to our team about what interest rate may apply to you. Remember, unsecured loans typically have higher interest rates than secured loans, regardless of whether you have strong or poor credit.
Comparison rates
Remember that comparison rates are used to indicate the true cost of a loan, and the indicative interest rate is usually based on someone with a strong credit rating. So if you’re shopping around for competitive rates, the most attractive option may not be accessible to someone with a poor credit history.
Variable rate vs fixed rate
A variable interest rate is subject to fluctuate when interest rates rise or fall. On the other hand, a fixed rate is fixed at the beginning of the loan and won’t change for the duration of the loan term. The benefit of a variable rate is that your repayments will drop in the event that your lender passes on reductions to the interest rate. The downside, of course, is that if interest rates rise, then your repayments will be higher.
What are the fees on a wedding loan?
Each wedding loan option will come with a different set of fees. Keep your eyes out for the monthly fee and whether they charge penalties such as exit fees or early repayment fees.
Let Finance One help you start your new life together
Bad credit doesn’t need to unravel your dreams to tie the knot. At Finance One, we are experienced with lending to borrowers who are seeking wedding finance with a bad credit history and can help you through the whole process.
Planning a wedding isn’t easy, but at Finance One, we can give you a fair go to give you the funding you need to make your wedding dreams a reality. Contact our friendly team, or apply online to get started.
Normal lending criteria apply. Fees and charges are payable. Terms and conditions apply.
Finance One means:
Fin One Pty Ltd – ABN: 80 139 719 903
Australian Credit Licence: 387528
Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent advice regarding your legal, financial, taxation or other needs, to check how the information relates to your particular circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information. All loan applications are subject to normal lending criteria. Fees and charges payable. Terms and conditions apply.
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