Qualifying for a Wedding Loan with Bad Credit

Getting a wedding loan with bad credit poses particular challenges as these loans typically are unsecured and have higher-than-market interest rates. But by understanding wedding loans and knowing your options, you can still get a loan funded to pay those wedding bills.

Understanding Wedding Loans


Wedding loans are big business. The average wedding in the United States costs $28,000 and can run almost twice that depending on the city in which the wedding takes place. So, while the amount is akin to a car loan, there is no vehicle to secure the loan so interest rates often are higher.

Wedding loans are part of the larger personal loan industry, and a variety of options are open to you get one. But as with any loan, bad credit will make it more difficult and more expensive.

Improving Your Credit

The first move in getting a wedding loan with bad credit is to improve your credit score.

Anyone who borrows has a credit history on file with the three main credit reporting bureaus: Experian, Equifax and TransUnion. Your credit report is a history of your borrowing and any negative activity such as late payments. Your credit history is a major component of your credit score, which is calculated for most by the Fair Isaac Corp., yielding your FICO score.

The median U.S. credit score is 720. A score of 760 or better is considered excellent and will qualify you for the best rates a lender can offer. A score of 620 or below classifies you as a subprime borrower and you will pay at least three percentage points more in interest than excellent borrowers.

There is no quick fix for a bad credit history, but you can make your fastest improvement by finding, documenting and fixing any mistakes in the negative information. After that, it takes time and a good financial track record of paying off debts to improve your score.

Secured Loans

Of course, weddings often come up before you can repair your credit history. If you don't qualify for a personal, unsecured loan because of bad credit, lenders will consider extending credit if you offer security or collateral. A loan can be secured with cash, by pledging a non-retirement investment account, jewelry or anything of value.

In the right circumstances it can be possible to borrow against equity in your home with a cash out refinance or a home equity loan.

Co-Signers

The effects of your bad credit on a wedding loan can be overcome if someone with good credit co-signs the note with you. This has the advantage of getting you the loan you need now, plus, if you pay on time, helping to improve your credit history over time.

Adjusting Your Amount

The ability to borrow for a wedding loan with bad credit and the terms you are offered results from a number on related factors. Even with bad credit if you pay a higher interest rate to offset the lender's risk, you can get your loan. Of course, the personal financial circumstances that lead to your bad credit might also prevent you from qualifying for the higher payments the higher interest would generate. The loan amount works in similar fashion. If you reduce the amount of money you are borrowing, resulting in lower payments, you might find that you qualify for a wedding loan with bad credit on the lower amount.

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