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Wedding loans in Australia – Compare offers for your big day
Planning a wedding not only takes time, but it may also end up costing a small fortune. If you’re a couple wondering how to pay for it all, there are financing solutions lined up for your rescue. This wedding loans guide explains the available options, and how to find the best one to start your new chapter in life.
What are wedding loans?
A wedding loan is simply a personal loan in disguise. While you can use personal loan money for technically anything, in this instance, the funds go to cover your wedding, hence the name. After your perfect day becomes a reality, you conveniently repay the debt in regular instalments that also include interest. The following breakdown paints a clearer picture of how wedding loans work in Australia:
- Minimum/maximum amounts to borrow. Personal loan amounts offer $1,000 on the low end and up to $100, 000 or more on the upper end. Your circumstances and the lender’s limits will determine how much ends up in your bank account once your application is approved.
- Repayment periods. Your instalments might cover a minimum term of 12 months and a maximum term of 10 years.
- Fees and charges. Aside from interest, most lenders will also throw establishment fees, ongoing fees, as well as late payment fees into their product bundles.
- Qualifications. Generally, you’ll need good to excellent credit as well as a stable income. However, some lenders cater to borrowers with special circumstances. For instance, there are personal loans for self-employed individuals and those with bad credit.
Pros of wedding loans
- Fast, easy, and convenient funding. Wedding planning is much easier if you already have cash in hand. Some bookings need to be made months in advance, so it’s a major thumbs-up when you can get a personal loan through a quick online application, for example. What’s more, your bank account can receive the cash delivery in as little as 24 hours, though this is on a per lender basis.
- All-round flexibility. You’ll appreciate the range of financial freedom offered by personal loans when it comes to your nuptials. First, you can choose how much to borrow based on your unique situation. Second, you can split the lump sum to cover the million, wedding-related things listed on your budget. Lastly, you can work out a suitable repayment plan that ensures a financially stress-free honeymoon.
- Credit score boost. By spreading out the cost of your big day, you avoid overworking your budget. That means you can easily make repayments on time, and once you’re free of debt, your credit score will thank you for it. As a borrower who now has excellent credit, you can expect to get fast approval and favourable rates on future loan applications.
Cons of wedding loans
- Your credit score affects the quality of credit you get. If your credit score looks risky to lenders, you might not be able to sign up for a wedding loan. Some lenders may give you a chance, but they’ll impose high rates and fees to insulate themselves from financial loss.
- It’s easy to go over your budget. Wedding costs are typically on a sliding scale from simple and intimate to extravagant and elaborate. If you have a high borrowing capacity, it’s tempting to keep pushing the costs up to a point where you pull out all the stops. However, choosing that designer dress and those specially packaged invitations may end up getting you further into debt.
Is taking out a wedding loan a good idea?
If you have weighed the pros and cons of taking out a wedding loan but are still sitting on the fence about whether to go ahead or not with it, you may also need to consider the following:
- It’s a mutual decision. Starting a marriage union while indebted is something that will affect both you and your partner. It’s therefore important to hash it out with your other half to ensure you’re on the same page before you check in with lenders.
- Can you afford it or not? Qualifying for credit is one matter, but being able to pay it back is another piece of business. Take stock of your finances to figure out how much debt you can tackle. At the end of the day, it’s important to remember that you can organise a fabulous event on any budget with a few money-saving tips.
What’s in a wedding budget?
Need to work out a budget before you commit to a finance option? Kick-start the process by putting down essential costs first. You can then add on the extra trimmings until you reach your set limit. Check out the top ten expenses you’ll need to consider below:
- Catering (food and drink), plus wedding cake
- Bride’s dress and groom’s attire
- Photography and videography
- Attire for bridesmaids, groomsmen, flower girls, pageboys etc.
- Marriage celebrant/ministers of religion
Types of wedding loans
Like weddings, wedding loans also come with several options to choose from:
- Secured. A secured personal loan has an asset that provides insurance for the lender behind the scenes. Whether it’s your car, house or other valuable, the lender will assume ownership of the asset if you backslide on your repayments. Because it’s a low-risk arrangement, most credit providers offer competitive terms for this type of loan.
- Unsecured. In contrast to secured loans, unsecured personal loans are a popular option that won’t require you to provide collateral. But, because the lender has no leverage over any of your assets, they insure themselves from financial loss by increasing borrowing costs.
- Fixed. Fixed-rate loans remain at a standstill over the life of your loan, and this makes for a consistent budget. But, on the other hand, if the Reserve Bank cash rate falls, you’ll have to forego any potential interest savings.
- Variable. Variable-rate loans are generally unstable, and you may have to fine-tune your budget several times while paying your debt off. However, potential interest savings are in store for you if the cash rate declines. But, then again, your loan’s total costs may increase if the cash rate swings up.
- Joint application. With a joint application personal loan, you can be partners in life and partners in debt. This shared responsibility can net you better rates, more borrowing power, plus other benefits.
The best way to compare and find wedding loans
- Browse our comparison table. BestFind’s product table is a time-saving tool that allows you to check out the Australian lending marketplace quickly and conveniently. Our featured financial services providers are authorised, and you have a wide range of products to choose from.
- Apply the filter. While using the table for your personal loan comparison, it’s best to apply the filter. For instance, secured loans should be contrasted with other secured loans. Doing this not only helps you to narrow down your options quickly, but you also get a better idea of which loan type works best for your situation.
- Calculate. Our wedding loans calculator shows your estimated monthly repayments for a given amount and term. Choosing an affordable option is recommended, but you should know that lower repayments may mean a prolonged loan term. When you take more time to pay off your wedding loan, the cost of borrowing automatically increases.
- Check the comparison rate. Interest is not the only cost to worry about when you finance your special day. The comparison rate for any offer includes the interest rate, but it also takes into account other standard fees and charges. You can still check for hidden fees outside of the comparison rate, but generally, the comparison rate is designed to show the actual cost of a particular loan.
- Look for flexibility. Choose an option with features that make life easier for you. This could be a redraw facility where you can get back extra repayments in a tight situation. Or, it could be a discount, fewer charges, and the freedom to pay off your loan early.
Kick-start your special day with a personal loan application
Once you find a personal loan that’s spot-on, you can set your application in motion by clicking the “Go to Site” button. But, before you visit the lender’s website, here’s what you’ll need:
- Proof of identity – passport, driver’s licence
- Details about your expenses, assets, and debts
- Proof of income – payslips, bank statements
- Proof of residence – utility bills
Wedding loans FAQ
Can I apply if I have bad credit?
Yes. But, keep in mind that a subprime credit score affects how much you can borrow. You might also not be able to get the lowest rates and charges available.
Are there any ways to reduce wedding costs on your own?
If you want to borrow less, there are smart ways to cut costs without compromising the quality of your event. You can: borrow from family and friends, make bookings in advance to avoid short notice fees, or shop around for vendor discounts.
What else can I use to pay for my wedding besides a personal loan?
If you’re a homeowner, you can use your equity to fund the event. Your bank account may also have an overdraft that allows you to borrow money up to a specific limit. Generally, credit cards have high finance costs, but if you find a 0% offer, this can turn out to be affordable.
Where else can I get finance besides major banks in Australia?
You can also get wedding funds from Australian credit unions. If you want to cut out the middleman, you could consider peer to peer lending companies as an alternative option.
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