Loans for Weddings and Vacations
The wedding requires large financial investments, so many newlyweds have to take wedding loans. It should be noted that special loan programs for organizing weddings are not in demand among domestic bankers. Usually, to finance an event, you have to take a standard non-targeted personal loan for various needs. Newlyweds have to pay off their debts for several years, so you should carefully study the advantages and disadvantages of borrowing money.
Features of a wedding loan
A special offer from domestic financial institutions is a loan for a wedding. Budgeting wedding events involves many items of expenditure, so before contacting the lender, you need to draw up a complete estimate of the celebration. To do this, it is worth contacting an experienced organizer who will prepare the solemn event. By borrowing money, you can cover all the wedding-related costs or part of the costs that personal savings are not enough to pay off.
The main costs during the wedding celebration:
- Booking a banquet hall in a restaurant;
- Payment for the services of the event organizers;
- Hiring qualified personnel;
- Purchase of clothing, including the bride’s dress;
- Buying rings and other jewelry;
- Rent of vehicles;
- Accommodation of nonresident guests of the event;
- Minor expenses.
A wedding loan for consumer programs does not require careful allocation of costs, as there is always the possibility of price increases for certain services. However, the approximate loan amount is always calculated in advance based on information available to experts in the holiday industry.
The cost of a wedding largely depends on the region of residence of the newlyweds. In the case of planning an outdoor event, the cost of services can increase significantly. The borrowed money can be used to organize a wedding abroad, but in this case, part of the budget will be spent on organizing the trip. The costs increase significantly if the events are held in the resort regions.
To fully pay for the wedding, it is better to take a loan that is at least 10% higher than the budget. The reserve can be used to cover various losses that may arise due to force majeure circumstances. When it comes to partial coverage of costs, in the process of calculating the optimal credit limit, you can start from those services for which the newlyweds do not have enough funds. All sorts of small expenses are often covered without any problems by getting public credit cards.
Benefits of a wedding loan
It is often impossible to find a targeted loan program for organizing a wedding. Responsible lenders have drastically scaled back their loan product lines over the past couple of years, abandoning specialized forms of financing in favor of classic personal loans with fine-tuning of individual contract terms. In other words, clients lost the possibility of targeted lending but gained access to loans for any need, the essence of which is a simplified scoring scheme, reminiscent of the consideration of applications in ordinary microfinance organizations. However, lending rates have also increased significantly.
Advantages of a personal loan for organizing weddings:
- No paperwork involved;
- Relatively low interest rates;
- Lack of collateral;
- Comfortable loan terms;
- Get money within one day.
If desired, the borrower can apply for a loan without providing proof of income, but the lender will reserve the right to raise the interest rate or significantly cut the loan amount. You can apply for a loan for one of the future spouses, but the best option would be joint borrowing of funds. In this case, the regular income of the bride and groom is added up, increasing the chances of improving the terms of the deal.
Disadvantages of a wedding loan
Despite the huge list of advantages, going to a bank for a wedding loan has several tangible disadvantages. Experts say that the main problem of the lending scheme is the impossibility of obtaining financial benefits from a marriage, that is, a wedding is absolutely illiquid for all parties to the transaction. The costs for it will never pay off, even if guests and relatives decide to give the newlyweds large monetary gifts.
Disadvantages of a personal loan for a wedding:
- A wedding involves a large waste of money;
- The budget can grow rapidly and unpredictably during the organization of events;
- There is a risk of disputes between co-borrowers in the event of a cancellation of a wedding or divorce.
If one of the spouses takes out a loan alone, after a possible divorce, he or she undertakes to personally pay off the debt. It is possible to restore justice by involving all materially interested parties only after receiving an appropriate court decision. Until this moment, all the difficulties associated with depositing funds on a loan will fall on the shoulders of the borrower who signed the agreement.
The first years after the marriage and payment for the wedding loan, the newlyweds will have to live in conditions of financial austerity. The presence of an open loan agreement will also prevent the couple from taking other loans, including state mortgages for young families with a preferential financing program.
Types of wedding loans
In addition to obtaining a classic wedding loan, banks can offer funds for organizing accompanying events, for example, a honeymoon. Special loan products are provided by fashion designers, jewelry stores, wedding and event agencies.
Types of loans for wedding purposes:
- Installment plan in shops and wedding salons for the purchase of clothes, rings and various accessories;
- Loans in event agencies to attract organizers of special events;
- Loans for organizing honeymoon travel, including honeymooning abroad.
A complex loan product deserves special attention, which provides access to an extensive list of services. The service is provided by agencies providing turnkey weddings. In this case, the client pays for a special package of services that includes all the events necessary to organize the wedding. The main advantage of such cooperation is the reduction of associated costs. All costs are initially included by qualified experts in the total payment made by the client.
You will have to pay for the reservation of the restaurant and the services of some specialists in advance, so it is better to start preparing for obtaining a loan for organizing wedding events a couple of months before the appointed date of the celebration. However, some payments are made after the end of the celebration. Money can be kept in a bank account since most financial transactions are carried out through non-cash payments.
Loan application scheme:
- Plan your wedding;
- Consult with the organizer;
- Draw up an estimate of all expenses;
- Choose a bank for cooperation;
- Apply for a loan;
- Get funds;
- Pay for the wedding.
About 50% of the wedding budget is the payment for the banquet. Costs depend on the number of guests. The more expensive the menu, the higher the cost of renting a restaurant. For the purchase of rings, the groom usually saves money separately, but you can also use loans from jewelry stores. A significant part of the savings is spent on recruiting personnel and renting vehicles.
Loan conditions for organizing a wedding
The minimum loan amount for payment of special events is usually $1,000. Often we are talking about additional funding. If the missing amount is below the specified mark, you should pay attention to the offers from microfinance companies. Quick loans are far from the most profitable type of loan, but you can get funds within an hour, so cooperation with microfinance companies is the right decision in urgent cases. The maximum loan amount is usually no more than $1,000.
Standard terms of a personal loan for a wedding:
- Term: from 3 months to several years;
- Possibility of attracting a co-borrower or guarantor;
- An application is submitted through the official website of the lender;
- The loan amount is $1,000-$7,000;
- Approval within several hours.
Spouses usually have to repay a loan for a wedding jointly since the money is in fact spent on common purposes. In the event of a divorce, the co-borrowers are equally liable for debt obligations or voluntarily distribute the costs along with the jointly acquired property. If one of the former spouses refuses to repay the loan, the bank requires payment from the second borrower who signed the agreement. You can also resolve controversial issues related to the division of responsibility through the local court.
Experienced organizers can work out the budget of a future event without any problems, but some experts provide assistance only within the framework of paid consultations. To save money at the preparatory stage, it is enough to study the average prices for organizing weddings in the region where the celebration is planned. Based on the figures obtained, it will be possible to quickly select the optimal loan program.
So, you have decided that it is time to finally have a rest. You may need to go on a vacation urgently because friends invited you. Or, maybe, on the contrary – at last there was an opportunity to break away from the familiar environment and ignite in loneliness. The only problem is no money. Therefore, the task can be formulated as follows: to get a loan for a vacation.
When you should take a vacation loan
It makes sense to apply for a loan if:
- it is not possible to save the necessary amount by a specific date;
- you have savings, but you cannot use them because you plan large expenses in the future;
- you need money in the account for other purposes (car repair, treatment, training);
- you are planning to invest your savings on very favorable terms;
- you will be promoted soon, so the loan will not become a heavy burden.
In other cases, lending can hardly be attributed to a reasonable decision.
Pros of a vacation loan
You will receive the desired money immediately. You worked hard for a whole year. Well, now you can relax. There is enough credit for round-trip tickets, for hotel accommodation or in the private sector, for entertainment, for delicious meals, and for delicacies. At the same time, you will not have to cook, wash the dishes or clean the premises. You are a vacationer! And that’s it.
Cons of a vacation loan
A vacation loan also has some drawbacks. Going to the ocean or abroad, you do not want to count every penny, so they take a loan in the amount exceeding the required money, and this is already a significant overpayment. But who thinks about it before the vacation?!
But, as you know, any vacation ends someday. You will return home with empty pockets but with loan obligations. And your financial situation may deteriorate. After all, our life is unpredictable. You may lose your job or your paycheck will be delayed, etc. Therefore, a vacation loan is suitable for people who are sure that they will be able to repay the debt on time. In any case, it’s up to you to decide: take a loan and go to the seaside right now or wait another year, save up, and only then go to the seaside. Each of us is the master of our own destiny. Don’t be afraid to make informed decisions.