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 Do You Need A Wedding Loan?  
 

You've found the spouse of your dreams, and you want to celebrate your
commitment with a lavish affair. Problem is, how do you pay for it? These
days, the cost of tying the knot in a formal ceremony with two hundred
guests can cost more than $20,000. Strategies to consider include
adhering to a strict wedding budget, the pay-as-you-go plan, or taking
out a wedding loan. The basic rule of thumb: don't spend more than you
can repay in a maximum of three years.  
 
 
SAVING

With a bit of imagination, you can come up with ways to keep your
expenses down. After all, who really needs another engraved matchbook?
Make staying within your budget a priority. Among the options you have to
finance your wedding, planning ahead and saving money is the best. If
you're planning a long engagement, you might open a separate wedding
account and save as much as possible in the months beforehand. If your
wedding date is on the horizon and you don't have much time to save,
opening a money market account is one option. With a money market, your
savings will get a quick boost, and it allows you to write checks for
wedding expenses. You could also increase your savings in a short-term
CD; a six-month CD could give you some extra cash to pay for a limo, a
cake or flowers.

PAY-AS-YOU-GO

You can also try the pay-as-you-go plan, which is a great way to shrink
that final tab. To hold the date, most wedding vendors, including the
baker, caterer, reception hall, dressmaker and florist, require a 50%
deposit when you place your order; they then add a small finance fee to
your balance and bill you monthly. By the time the big day arrives,
you'll have your vendors paid.

LOANS

If saving money and paying as you go is not an option and you need fast
cash, then a wedding loan may be your best bet. Just remember that
interest payments on a loan can make your wedding that much more
expensive.

Credit Cards

If you use a credit card to pay for your wedding you should treat it as a
short-term loan. Using a credit card for such a huge purchase requires a
lot of discipline, and it may be hard to pay it off in a short amount of
time if you're setting up a new household. Before you charge your wedding
expenses on your credit card, you will need to figure out how much money
you can dedicate every month to clearing the debt; paying interest on a
huge sum will make the balance due that much greater.

Of course, a credit card is an essential tool for making down payments on
gowns, rings and venues, so choose one that has a low interest rate. When
paying your wedding vendors and making purchases for your wedding, try to
use a credit card that "gives you something back;" some credit cards earn
points for air miles, gifts and long distance calling. (Those extra air
miles could come in handy when planning your honeymoon!) Also, when you
pay for items with a credit card, Federal law protects against damaged or
undelivered goods, so if a vendor goes out of business and you've already
put money down you will be able to recoup your loss.

Personal Loan

A type of loan growing in popularity is the personal loan. It's an
unsecured loan that you get from a bank or a credit union. You can use a
personal loan for any reason, including your wedding. Terms and interest
rates vary, so you'll want to shop around at different banks to find one
that's right for you. The first place to look for a loan is a small
community bank or a credit union, which usually has the best deals. You
will want to meet with one of the loan officers to discuss your loan and
fill out the proper paperwork. It only takes a few days to find out if
you qualify.

Credit Union Loan

Credit unions are an excellent place to apply for a loan, and they
usually offer better interest rates than banks. Basically, credit unions
are not-for-profit organizations which serve a group of people who share
something in common, such as an employer, their location, a university,
etc. They provide a safe, convenient place for members to save money and
to get loans at reasonable rates. Many credit unions offer short-term
unsecured loans and more than half will make loans for amounts less than
five hundred dollars, which might pay for an added luxury.

Wedding Loan

Some banks do offer a loan specifically for wedding expenses. The program
allows couples to borrow up to twenty-five thousand dollars to plan for
their wedding, assuming their credit and incomes qualify. Interest rates
are reasonable, with terms as long as six years. Generally, there are no
annual fees and no penalties if you pay it off quickly, and a couple can
use the money for whatever they choose. You can also contact licensed
credit brokers who deal with many lenders and financial institutions, who
can help you secure a wedding loan. When shopping for a loan, always
judge it by the total cost of the loan, not just the monthly payment. Be
sure to read contracts carefully, and be certain you understand the
terms.

Home Equity Loan

If you are a homeowner, a home equity loan or line of credit is a great
way to fund your wedding. The interest rate on a home equity loan is
usually low and this type of loan allows you to withdraw only the amount
of money you need. This is good because you don't pay interest on any
money other than what you use; for example, you could have a $20,000 line
of credit to pay for your wedding, but if you only use $5,000, then
you'll only pay interest on that. Remember, though, that in this instance
your home is being used as collateral.

401(k) LOAN

Another option might be to ask your employer if you can take a loan out
against your 401(k), though this has its risks. Although it's easy to
borrow from your 401(k) plan, unless you pay it back you will have to pay
taxes on the amount you borrow plus a 10%penalty for early withdrawal.
Keep in mind that withdrawing your money early means you have that much
less saved and earning interest towards your retirement.