A wedding is a once-in-a-lifetime affair (ideally), which is why many will go all out and do everything possible to make it one of the most memorable days of their lives. Hosting a wedding costs money, but sadly, not everyone has what it takes to have the wedding of their dreams. How, then, can one fulfill this dream?
There are a few options that come to mind when thinking of how to host a ceremony that will stick in one’s memory as long as one lives. One option is getting funding from family and friends, but what happens when said family and friends do not have the money to provide the funding? Well, you can turn to banks or financial institutions.
Turning to banks and financial institutions entails taking out a loan to fund your big day. You can visit billigsteforbrukslån.com – lån til bryllup for more details. Meanwhile, we will share some basics on wedding loans and how to access them, so stay with us quickly.
What to do Before Applying for a Wedding Loan
Once you fix the date for your wedding, many things must be done, and if you do not keep track of them all, you will end up being stressed. The most important thing is to create a budget for the big day. This will help to keep you grounded and also know whether you have enough money to execute all your plans or whether you need funding/assistance.
The following are some of the things that you need to bear in mind as you set up a budget:
- Venue for the occasion
- Clothing for both the bride and groom for every aspect of the ceremony
- Wedding rings
- Catering (food, drinks, waiters, et al.)
- Wedding cake/desserts
- Invitation cards
- Venue décor
The above list is highly inconclusive because weddings are highly individualized ceremonies. Some people prefer quite simple ceremonies that don’t require too much planning, while others prefer elaborate shindigs that even require the service of a wedding planner/coordinator.
No matter the category you fall into, you still need planning and finance. So, if after setting up your budget, you notice that you need funding, it might be time to consider taking out a loan.
Basics of Wedding Loans
As we stated earlier, a wedding loan is cash advanced to a person to fund their wedding. This loan is just like any other type of loan, but the difference is that it is solely for weddings. This loan can either be secured or unsecured; secured means it is backed by collateral, while unsecured means any collateral does not endorse it.
Although we have labeled the financial product that one can get from the bank to finance their big day as a wedding loan, they are basically consumer loans. Consumer loans are money advanced to customers that they can use for any purpose. So, based on this definition, a consumer loan is a good option for someone looking to sponsor their nuptials.
An unsecured consumer loan has a maximum limit of NOK 600,000, which you can pay off over a specified number of years. The advantage of this option includes the following:
- You have many options to choose from.
- You do not need to put down any collateral.
- The application process is fast.
- You get funding immediately after your application is approved.
- Eligibility criteria are not steep.
- You can get a low-interest rate for a joint application.
The major disadvantage of this type of credit facility is that it is more costly than loans backed by collateral. Another disadvantage is that the monthly payment is high because the loan must be paid off in 5 years.
Factors that Affect Unsecured Wedding Loans
As mentioned earlier, a wedding loan is essentially a type of consumer loan. Therefore, when discussing wedding loans, we are essentially discussing consumer loans. The factors that impact the cost of consumer loans also apply to this type of loan, and they include the following:
- Interest rate, which is between 5 and 25% on average.
- Establishment fees – this is between NOK 950 and 1,100.
- Loan terms and conditions.
- Administrative fees and charges.
You can also choose to secure a loan using your home as collateral. Please refer to this article for more information on collateral. However, this option will only make sense if your loan-to-value ratio is low. With such an option, you can obtain an interest rate as low as 2% to 4%.
The criteria for eligibility for this option include the following:
- The amount applied for must not be more than 85% of the total value of the collateral, which is the home.
- Your debt-to-income ratio must not be more than five times your annual income.
- A payment note that shows a willingness to repay.
How to Find the Cheapest Wedding Loan
The market for credit facilities is quite competitive, and consumers should take advantage of it to get the cheapest loans available. The following tips will help you out:
- Check out as many offers as possible.
- Apply through an agent – this is a very good option because loan agents have a network of lenders that they work with. This means that your application process will be faster as you will have many options to compare, and you can do so faster than if you try to do it yourself. More so, the service is free, and there is no binding agreement to any offer.
- Look for the best terms and conditions that you can cope with, even in your direst financial condition.
A wedding, as we said, is ideally a once-in-a-lifetime affair, so no one would begrudge you having the most memorable event of which you can think. However, in the process of trying to have your dream wedding, it would be bad for you to enter a cycle of debt for years to come. That is why we have shared some tips that will help you get funding without stress. We believe these tips will come in handy and help you achieve your happily ever after!