ALL ABOUT WEDDING LOANS: FEATURES, PROS & CONS
One of the most typical ways to mitigate a financial crisis is by borrowing a personal loan. You can borrow this type of loan for any purpose, and money will be credited to the bank account within the same day or a maximum of 4 working days.
Besides this type of instalment loans, sometimes require no credit check if the lending party is direct lenders.
Are you planning to tying your knot and looking for a good source of fund? Congratulations! As applying for a wedding loan will be just perfect choice for you. In UK couples can borrow up to £30000 for the purpose of marriage.
Therefore, if you are pondering whether it will be the right choice or not, you are absolutely at the proper place because we will discuss all wedding loans and their features, pros and cons.
What is a wedding loan?
It is an unsecured personal loan that requires minimum eligibility and comes with a monthly repayment facility. The interest rate is fixed at the time of disbursement, and the borrower has to pay a uniform amount every month until the completion of repayment tenure.
While applying for such a personal loan, the lender may ask the couple the purpose of borrowing. You can take a personal loan to fulfil various purposes to keep track of the exact reason for borrowing it is asked. However, the process of wedding loan is really fast. Besides, the couple can choose their ideal repayment tenure. The maximum disbursal amount is also set as per the standard budget of a royal wedding.
While talking about the eligibility, it should be mentioned that any of the people among the couple can be eligible for a wedding loan. Even if a person has a bad credit score, he can borrow this type of instalment loans from direct lenders. A person who fulfils criteria such as:
- Have a bank account
- Resident of UK
- Age should be above 18
- Good credit score
- A stable source of income
- Proof of marriage such as registration certificate
- Identity proof
- Residential proof
The attractive features of wedding loan made it popular with couples. They are:
- The interest rate is fixed, and it is comparatively low than another type of loan
- A monthly repayment facility
- The ease of selecting repayment term. For instance, a couple can end up the repayment at any time within five years
- There are no hidden charges. The processing fees can be deducted from the disbursed amount Sometimes, especially in the wedding season, lenders offer discounts on processing fees
- An adequate amount can be borrowed, which will complete all the expenses of the wedding
- Quick disbursal with minimum verification
- Possibility of getting a loan even with a bad credit score
- Pros of wedding loan:
By analysing the features and eligibility, it is not difficult to understand how effective it can be to drive out financial need during the wedding. There are numerous advantages of borrowing a wedding loan. Such as:
- A lower rate of interest is one of the most attractive pros of this loan. If you look at a house loan or business loan interest rate, it will be visible how minimal interest you will be paying throughout the repayment term. Moreover, the interest rate is pretty low even from the credit card monthly instalments.
- Before disbursing the amount, the borrower can quickly negotiate with the lender about repayment tenure. You should repay the entire outstanding within five years. If a person wants, he can complete the whole settlement just after one year.
- A Uniform monthly repayment facility will provide you with the comfort of planning a budget. Just after the marriage, life takes a new turn. To run a family properly, certain things need to be changed. Planning a budget is one of the most important things as you have taken a loan. You can pay the total debt with little amount every month, so it becomes easy to design your family’s budget.
- One can borrow from £5000 to £30000 for the wedding. Although the minimum amount can be borrowed by credit card, you cannot borrow the maximum. Besides, you can improve the credit score by taking more than one loan and without failing single repayment.
- Cases have been observed where couples had no plan to borrow a wedding loan, but they opt for the debt at the last moment. Because of its quick process, even at the last moment, borrowers can be facilitated.
- Loans can be provided to those who are not having a good credit score. So, couples who dreamt about a wonderful wedding but not possessing a good credit score need not worry while applying for a wedding loan.
It will lie if we tell there are no disadvantages of taking a wedding loan as everything has its bright and dark portion. The disadvantages of this loan are:
- There is an undeniable disadvantage of possessing a bad credit score. The persons have bad credit score they only eligible for such instalment loans from direct lenders. Now, these lenders may ask the borrower to agree to a comparatively high-interest rate regarding a personal loan. Therefore, the significant portion of monthly instalments will consist of a huge amount of interest and a minimal amount of outstanding principal.
So, at the end of the repayment term, it is not unusual to discover that borrower has paid more than the amount of debt.
- As mentioned above, the minimum borrowing amount is £5000, which means a couple can opt for the minimal loan amount. Therefore, whenever you are opting for a minimal amount of debt, it will be more burdensome. The rate of interest also becomes higher for owing a small amount.
- A wedding loan is not at all good. Because, at the beginning of your new life, you are taking the burden of short term instalment loans. Although the ease of no credit check and borrowing from direct lenders may seem beneficial, these can actually put you both in a financial crisis.
Due to financial crisis, many couples fail to maintain a healthy conjugal relationship, leading to divorce later.