What is a Wedding Loan?

A wedding loan is money borrowed for the purpose of paying for the costs related to a wedding ceremony and reception.

Many financial institutions will offer this type of loan, and the amounts can range from $1,500 to $25,000 or more. You will more than likely find an unsecured wedding loan, meaning that collateral is not needed to secure the loan. The options may be listed under the category of unsecured personal loan. Once your wedding budget is determined, you can request a certain amount to cover your needs.

The interest rates on such loans can vary. Depending on the lender and your credit score, the interest rate on your wedding loan can be anywhere from 12 percent to nearly 30 percent. This loan can be at a fixed rate, meaning the interest will remain the same until the loan is paid off, or variable rate, meaning the interest rate can fluctuate over time.

There is usually no prepayment penalty on wedding loans, and full repayment is normally due 12 to 48 months after the wedding.

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