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Probably the worst way to finance your wedding would be to use credit cards. They are by far the most expensive way to borrow money at interest rates that average 15% and can even be higher. Plus, the credit card companies’ number one goal in life is to keep you in debt. There are several ways they do this. The first is by offering those minimum monthly payments. Pay just them and instead of being debt-free in three to five years it could take you literally 10 or more years to pay them off. Plus if you were ever to make a late payment you would not only get hit with a steep fee but your interest rate could be increased and your credit limits reduced.
If borrow you must
If you and your partner have agreed you need to get a loan to finance your big day there is a less expensive way to do this. It's to get what's called a peer-to-peer loan. There are a number of websites that offer these loans including Lending Club, Prosper, SoFi and Upstart. The advantage of these loans is they have much better interest rates than you could get from a bank or credit union and definitely a much better one than with credit cards. The reason why they can offer interest rates as low as 6% is because the entire loan process is done online. Lenders have no overhead and pass their savings on to their borrowers in the form of lower interest rates. Also, peer-to-peer lending eliminates the middleman – the bank or credit union and their profit margins. These loans come directly from the lenders, which can be another person, a group of individuals or an institutional investor. Of course, to get that really low-interest rate you will have to have a very good credit score the same as if you were getting a low-interest bank loan.
It’s important but...
There's no question about the fact that your wedding day is important and should be treated as such. However, it's also important to think things through carefully and to take steps so that you won't end up being in debt for 10 or more years. Before you decide to pay for your big day with a wedding loan take some time to think about what's really best for you, your bride or groom and your futures.