According to price Comparison website Money Supermarket, did you know over 50,000 couples have applied for loans to fund their wedding day costs so far this year. Of this number, one in ten couples have requested to borrow more than £20,000. It has also been reported that there has been a 53% increase in £30,000 plus wedding loan applications compared to last year. Since January 2017 to March 2017, collectively British Couples have asked for approximately £460 million to fund their wedding day.
Our tips before taking out a wedding loan:
- Look for the best deal
When it comes to taking out a loan ensure you check what the Annual Percentage Rate (APR) is. Essentially, the APR informs you of the true cost of the loan taking into account interest payable, any other charges and when payments fall due. When checking which wedding loan to take out, be sure to compare APRs.
- Early Repayment Charges
Do not forget that it is possible to pay off your wedding loan early. Often this is desirable to couples particularly if they wish to be debt free or where paying off a loan may impact their ability to borrow further (for example, to purchase a house). Many loan providers will charge an early repayment fee if you wish to pay off your debts early. If you think there maybe a possibility that you can pay off your loan early, try and search for a wedding loan deal that comes without any early repayment fees.
- Check your credit rating
Wedding loan lenders are only required to offer their advertised ‘typical’ APR to two-thirds of applicants. If your credit rating is not in good shape, you maybe offered a more expensive deal than the low rate loan you originally applied for.
- Secured v Unsecured loans: know the risks
Secured loans are cheaper than unsecured loans but run the risk that your lender will be able to take a charge on your property. This means that if you are unable to keep up with your repayments, you risk losing your home. Secured loans generally are only offered to homeowners who have sufficient equity in their property. So do not sign up for a loan unless you are 100% sure that you will be able to meet your repayments.
- Check the small print
Never sign a document without checking the small print. Should you need any assistance in understanding the meaning of your loan agreement, always consider obtaining legal advice.
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