Wedding and Honeymoon Loans

Name: Wedding and Honeymoon Loans
Creator: Savvy
Published: 2020-12-16T16:58:07+10:30

Home > Personal Loans > Wedding and Honeymoon Loans

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Written by , updated on July 4th, 2024

Planning your wedding and honeymoon can be one of the most exciting times of your life, but it can also come with significant financial challenges. One solution is to take out a personal loan to help you cover the costs. If you are looking for a wedding loan to cover the big day or funds for your honeymoon, Savvy can help. We can compare deals from a range of lenders to find a deal to suit your needs. Get started with a free quote today!

What is a wedding loan and how does it work?

A wedding loan is a form of personal loan designed to help you out with your special day. According to Moneysmart, the average Australian couple will spend at least $36,000 on their wedding. To help manage the costs, 60% of couples will take out a loan.

These personal loans are typically unsecured, meaning that you won’t have to put up any valuable assets like a car to secure your loan. However, to qualify, you will have to meet certain eligibility criteria, which typically includes:

Being at least 18 years old
Being an Australian citizen or permanent resident
Earning a minimum amount – usually at least $20,000 annually
Having a good credit score

Once approved, you will receive a lump sum amount. The loan amount can vary widely depending on your lender. On top of this, you will need to consider interest rates – which can be fixed or variable – and other potential fees.

What can I spend my wedding loan on?

Personal loans are usually quite versatile when it comes to how you wish to use your funds and can be used to pay for various wedding costs as you see fit. Your loan can cover the whole wedding or simply certain elements. Common wedding costs include:

Dress
Suits
Rings
Accessories
Venue hire
Flowers
Decorations
Photography
Entertainment
Cake
Food and drinks
Transport

All of this can add up quickly. Borrowing money can help you cover the expenses associated with getting married and manage the financial burden by spreading out the cost.

Can I buy an engagement ring with my personal loan?

Yes. If you've got your eye on a particular engagement ring but don't quite have enough in the bank to cover it, you can use a personal loan for your purchase. Loans can start from as little as $2,000 all the way up to $75,000, so whether you're looking at a cheaper design or something more expensive, you can get the funds you need.

You're not restricted to engagement rings either. The flexibility of personal loans means you can spend the money on whatever piece of jewellery you like, new or old. As such, you can purchase an engagement ring brand-new from a jewellery shop or buy a retro watch from a private seller. Once the funds hit your account, you can essentially use them without restriction. While jewellery is often highly valuable, these types of loans, like others, are typically unsecured and the jewellery is not used as collateral.

Can I take out a personal loan for my honeymoon?

Yes. You can put your wedding loan towards a honeymoon, or you could take out a travel loan specifically to cover some or all of the costs of your holiday. Again, these loans are typically unsecured and once you receive the funds, you can spend them as you choose. This applies even if you are taking your honeymoon outside Australia, as long as you reside in Australia and are able to meet other eligibility requirements. Honeymoon costs you could cover with a personal loan include:

Flights
Accommodation
Meals
Travel insurance
Shopping
Activities and excursions

Taking out a personal loan for your honeymoon can be a practical solution if you need immediate funds and prefer to spread out the costs over time. However, it’s crucial to carefully consider the terms and your ability to repay the loan. Exploring all available options and creating a budget can help ensure a financially smooth start to your married life.

How can I avoid spending more than I can afford with a wedding loan?

If you’re looking to cut down on spending, there are ways to save on your wedding celebrations.

Set a budget: make a list of all potential wedding expenses and decide which aspects are most important to you. Set a maximum amount you’re willing to spend on each item and try to stick to it. You can also save money by looking for discounts and putting your DIY skills to use rather than paying a professional.

Borrow only what you need: when you apply for a loan, you and your lender will agree upon a pre-determined amount based upon how you wish to spend the funds and your ability to pay the loan back. It might be tempting to borrow as much as you can, but this could lead to overspending and subsequently higher repayments on the loan.

Research and compare: compare interest rates and terms from multiple lenders, including banks, credit unions and online lenders. A lower interest rate translates to significant savings over the loan term, and a shorter loan term will mean higher monthly repayments but less total interest paid.

If you need help finding suitable wedding or honeymoon finance, you can compare your personal loan options through Savvy. Drawing from our extensive panel of lenders across Australia, we can help you find a suitable loan and ensure that your wedding expenses remain manageable.

Types of personal loan

Unsecured personal loans

With an unsecured personal loan, you can potentially borrow as much as $75,000 without the need to attach any valuable assets, such as your car, as security. These loans are the most widely available and often the quickest, with same-day approval possible.

Secured personal loans

Secured personal loans, on the other hand, make use of collateral. This lowers your risk profile in the eyes of a lender, potentially lowering your interest rate and expanding your borrowing power beyond what you may be able to get through an unsecured loan.

Variable rate personal loans

Variable interest rates remain open to fluctuation during your term. This means you can benefit from decreasing rates and save on your loan if the market heads in that direction, although you’ll also pay more if rates start rising.

Fixed rate personal loans

Fixed interest rates are locked at the beginning of your loan and remain constant throughout your repayments. This acts as a valuable protection against interest rate increases, as your loan will be unaffected, but you’ll miss out on potential drops as well.

Debt consolidation loans

If you’re paying off multiple debts at the moment, particularly those with high interest (such as credit card debts), consolidating them into one payment can not only make them more convenient to manage but also potentially save you money overall.

Travel loans

Looking to take off on a holiday with your family but want to pay it off at your own speed? Travelling can be expensive, so you can distribute the cost of your next trip over a period you’re more comfortable with by taking out a personal loan to pay for it.

Wedding loans

There are so many costs that go into making your dream wedding a reality, from venue hire to catering to dresses and suits and so much more. By taking out a personal loan, you can start planning the big day you want, even if you can’t pay for it upfront.

Renovation loans

Home improvements are desirable for a range of homeowners to help keep their living space fresh and interesting, not to mention increase its value. You can get past the financial hit of renovations with a personal loan paid in instalments.

Self-employed loans

Personal loans aren’t limited to PAYG employees, though. If you’re running your own business, you can still be approved for financing by submitting tax returns and other alternative documents instead of payslips and utilise your funds however you wish.

Student & education loans

There’s a variety of expenses which come with being a student, ranging from the cost of your courses, textbooks and computer to your accommodation. Taking out a personal loan can make these costs more manageable by spacing them out.

Green loans

Some lenders offer green personal loans, which are designed to be used for energy-efficient appliances and products such as solar panel and air conditioning installation in your home. You can qualify for lower interest rates and fees with this loan.

Pros and cons of wedding and honeymoon loans

PROS

Immediate funds

Wedding loans can offer a quicker application and approval process, so you could get quick access to the funds needed to cover wedding and honeymoon expenses.

Flexible use

Wedding loans can cover various wedding-related expenses, from the venue and catering to attire and entertainment, allowing you to allocate funds where they’re needed.

Spread out the cost

A wedding loan allows you to spread the financial burden of your wedding over a set term, typically 2–7 years. This can make the cost more manageable compared to paying everything upfront.

CONS

Interest costs

You’ll pay interest on the loan, typically at a higher rate than secured loans like car loans, which can significantly increase the total cost of your wedding.

Debt burden

Taking out a loan means starting your married life with debt. It can strain your budget and impact your ability to save for other goals like a down payment on a house.

Risk of overspending

Easy access to funds can tempt couples to overspend on their wedding, potentially leading to financial stress after the celebration.

Why compare personal loans through Savvy?

100% free

There's no need to worry about forking out to compare offers. Our service is free, so you can come back whenever you like.

Paperless applications

You won't need to worry about sifting through documents and visiting the post office, as they can all be submitted online.

Reputable lending partners

We've partnered with personal loan companies you can trust to ensure your comparison is a high-quality one.

Personal loan repayment calculator

Common questions about financing your big day answered

Can I get a wedding loan if I have bad credit?

Yes – we're partnered with lenders who specialise in lending to borrowers who currently are struggling with their credit score. It's important to note, though, that these loans come with greater restrictions on how much you can borrow (up to $10,000 to $12,000) and higher interest rates.

Can I get pre-approved for a wedding loan before I apply?

Yes – personal loan pre-approval can give you a clearer understanding of how much you can be approved for. This is useful if you're wanting to bargain on the cost of a particular item or service, as pre-approval gives your seller a clear ceiling over which they can't really go.

Can my partner and I sign off on a wedding loan together?

Yes. A joint personal loan could be the right move for you if you want to add the security of a shared repayment.

What are some alternatives to wedding and honeymoon loans?

If you need to finance your wedding, personal loans can be useful, but they are not the only option. Alternatively you could consider using:

Savings: set aside money in a dedicated savings account to cover the big day.

Credit cards: look for cards with a low-interest rate or rewards program, but be mindful of the potential for high-interest debt.

Are wedding loans better than paying with credit cards?

Yes – wedding loans come with competitive rates that tend to be substantially lower than credit cards. If you're unable to pay off your debt within your card's interest-free cycle (which you're unlikely to be able to do with a wedding), you're likely to accrue considerable interest debt.