Imagine on the wedding day, you are occupied by thoughts about the loan you need to repay that you have taken for your wedding. Your precious moments will be exchanged for haunting thoughts of huge loan payment. Your priceless moment is costing you so much and on top of it, you do not have the honeymoon plan included in your price.
Functionally, there is nothing like wedding loan. It is just an unsecured personal loan in which, the interest rate depends on the reliability of one or both potential life partners. In any case, kicking your marriage off with debt is a formula for pointless pressure and hardship.
If you are thinking to take a loan for your big day, you must consider the below points before applying for a loan.
You waste your money’s opportunity cost
Each dollar accompanies an opportunity cost, which means there are endless ways that one dollar can be spent. When you spend the dollar, you lose most of the other potential things you could have acquired with it.
Applying for a loan for a wedding is a twofold risk. By doing so, you not only lose the opportunity cost for every dollar you have spent but also restrain what you could have deliberately utilized your loan for, such as acquiring a home or beginning a business.
You increase the cost of your wedding
Having an extremely lavish wedding is expensive and availing of a loan for wedding is not advisable. Suppose you avail of a personal loan of $20,000 for your wedding at an annual percentage rate (APR) of 10 percent. Moreover, because, you and your spouse may have student loans, car payments, a few thousand dollars in credit card debt, and are hoping to buy your first home, you settle on a 10-year repayment period.
Considering this, your base regularly installment will be $264.30 every month for a long time. Amid that time, you will pay over $11,000 in interest. Your $20,000 wedding just soars to $32,000. Consider that for a moment. Ten years of your life and $32,000 spent paying for a five-hour occasion; that cash could have been an initial installment of a home.
Spending a huge amount on an extreme wedding builds up spending desires
This huge spending can rapidly saturate every single money-related choice and a mentality of entitlement can rise. This is because, when you have money, even in the form of credit, you tend to desire all the luxuries. After a lavish wedding, you would want your home to be rich and in the fanciest neighborhood, and therefore, you would apply for more loans. If you fail to repay installments on time, it may put you in a debt trap.
However, if you and your spouse can find a way out on being creative and have a wedding that is significant, close, and memorable, you would not require a wedding loan. You will set a tone of living inside your methods and esteeming quality over size and amount.
