The excitement about the wedding quickly wanes as one witnesses the costs. Moreover, as it is a one-time important life moment, individuals want to make it a memorable one. You may consider other ways to finance the costs. It is especially true when your finances do not align with your wedding expectations.
A wedding loan could be a better option to finance your important day requirements. It is a personal loan that you can use to fund nearly every wedding aspect. For example, you can use it for purposes like:
- Booking a wedding venue
- Hiring the event managers
- Catering and decoration
- Wedding dresses and suits
Vendor payments (photographers, musicians or videographers)
Additionally, you can use it for invitations, wedding gifts, managing surprise guests or additional accommodation costs.
How do wedding loans work?
Wedding loans work like other loans. You explore your options and approach a suitable loan provider.
You fill up the initial loan application form. The lender analyses your requirements and calculates your affordability.
He prioritises some basic parameters while calculating your loan repayment potential. Such aspects include credit score, income, employment situation, credit history, the repayment term and the amount you need. If he finds your profile suitable for the loan and believes in your credibility to pay, he sanctions it.
The process remains the same but the parameters may differ according to the lender.
Can you get a wedding loan with a credit score of 400?
The credit score part is the most important aspect of a wedding loan.
There is no fixed credit score to get a wedding loan. Every lender has its credit score requirement that a borrower must meet. Additionally, approval depends on whether the borrower meets the above-listed basic criteria. It also depends on the type of wedding loan you want.
If your profile reveals a poor credit history, you may not get a secured wedding loan.
Alternatively, by providing affordability proof like a guarantor, you may qualify.
Individuals with sound credit history can choose between secured and unsecured wedding loans depending on the amount they want. They may get quick loan approval with affordable interest rates.
Usually, one gets up to €50000 for 7 years as wedding loans. However, the amount stays low with unsecured wedding loans. You can get up to €25000 as unsecured wedding loans.
Whatever type you choose, you must meet the repayments until the chosen repayment term. Defaulting may lead to asset seizure in secured wedding loans.
Is it possible to get a loan for a wedding without a credit score?
No. You cannot get a wedding loan without a credit score. Every direct lender enquires about the borrower’s finances by analysing the credit report and score. It helps them understand the person’s affordability and reject or accept the application accordingly. Alternatively, a borrower without a credit score emerges as an unreliable borrower to loan providers.
It is because he lacks proof of financial management or a history of financial dealings or equipment usage. Financial equipment can be credit cards, loan payments, overdrafts, debit cards, rental payments, bill payments, etc. Thus, the lender rejects the loan application.
However, you can get loans for weddings with no credit score on one condition. If you can provide someone with a good credit history, score and income as a guarantor, you may get the loan. This is because the guarantor acts as a security on the loan. He is responsible for the loan repayments if the borrower fails to.
Identify the pros and cons of having a guarantor on the loan. A guarantor is usually a person with whom you share a close bond. Approaching him for having him as a guarantor on the loan may have mixed results.
If the bond is strong, he may be eager to help you and meet your wedding goals with friendly financial assistance. Alternatively, the loan may hamper your relationship with the person.
Thus, screen through your options before choosing a wedding loan for your needs.
What impact does a credit score have on your wedding loan?
Taking out a wedding loan can impact your credit score positively and negatively. If you make timely loan repayments on the loan, it improves your credit score. It reveals you as a credible borrower and sincerity towards financial management. Keeping the debt low and improving income and assets are the top financial goals to achieve for a good credit score.
Alternatively, if you skip payments on the wedding loan consistently, neglect constant emails regarding payment requests or delay the payment, it impacts your credit score negatively. It is because with one missed payment comes the penalty that hikes the interest rates. It thus, increases your liability on the loan and impacts your credit score negatively.
Additionally, too much debt in your credit profile increases your debt-to-income ratio. It is the ratio of the money you earn to the debts in your credit profile. A high debt-to-income ratio reveals irresponsible payment behaviour, and hence, lenders reject further loan applications. It is also the primary reason for low credit scores.
How to boost your chances of getting an affordable loan for a wedding?
You share the scope for qualification even with the worst credit history. However, make an effort to improve your credit score and wait until it improves. For example, if you have a wedding in 6 months, give at least 2 months to credit improvement and then apply. It will grant you exposure to better and more affordable deals with low-interest costs. Moreover, you may convince or negotiate with the lender on loan repayments or the costs.
Additionally, avoid applying for unnecessary credit cards until you get the loan with bad credit. It adds to the debt and does not help the credit score.
Bottom line
The credit score requirements for the wedding loan differ according to the lender’s criteria. Thus, there is no specific credit score to qualify for a wedding loan. Instead, it is about analysing the criteria and reviewing your credit profile. Check whether it aligns with your needs and affordability. If yes, apply and get the loan. However, additional checks may impact credit scores shortly. But, the impacts fade away over time.
