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The journey of finding your soulmate and tying the knot with them is an unforgettable affair. However, you don’t want to ruin your wedding day because of a mistake that you made while taking out the loan for it.
Wedding loans are a great way to help with the costs of your big day, but it’s important not to make these five mistakes. Deranging such beautiful moments due to an oversight can happen if you’re not careful!
Check this article and make sure not to do any of these five common mistakes, so everything goes smoothly at the ceremony!Make sure to avoid these five common mistakes that people make when taking out a wedding loan. Don't let them ruin your special day!Click To Tweet
Applying For A Wedding Loan – Mistakes To Avoid
Whether you believe it or not, applying for a wedding loan can be pretty complicated. Hence, making mistakes is pretty common. The following are a few of them:
Mistake – 1: Applying for a Wedding Loan Without Making Any Comparisons
There are thousands of different wedding loan providers out there. Each of them offers unique terms and follows a specific set of rules. Therefore, if you want to find the best option amongst them, you have to compare them.
According to SG Lendela, here are a few points that you should keep on your list while weighing up different options:
- The amount of interest rate they are providing
- Availability of additional charges (origination fee, late-payment penalty, insufficient-balance fee, etc.)
- The provided loan term and allotted monthly payment
- Annual percentage rate (APR)
Remember; you should always avoid a loan provider who asks for various additional charges for their services.
Mistake – 2: Underestimating Your Credit Score
There was a time when most loan providers avoided helping people with a low credit score. While this habit has been changed over the years, your credit history still plays a significant role during a loan application. Here’s why!
- Having a high credit score can help you get a lower interest rate from the loan provider.
- Many lenders tend to offer a better term duration to people who have an excellent credit history.
Hence, before you apply for a wedding loan, make sure to check your credit score beforehand!
Mistake – 3: Being Unsure About The Overall Loan Amount
Guessing exactly how much you will spend during your wedding is almost impossible. Due to this reason, many people tend to become unsure about the overall loan amount they should ask for. However, you shouldn’t make the same mistake as them.
Instead, we’d suggest you plan your wedding budget and submit the loan amount accordingly. This way, you can avoid taking a more considerable loan and decrease the amount of EMIs to some extent.
Mistake – 4: Hiding Information Regarding An Existing Loan
Are you currently dealing with other debt? Then, don’t be afraid to discuss it with your lender. In some cases, these people will try to negotiate with you, which, sequentially, may help you in decreasing the required interest rate.
Also, you can merge the existing debt with the wedding loan and pay off everything accordingly. Yes, you guessed it right! We are, indeed, talking about debt consolidation. And, here are some benefits that you can enjoy through this procedure:
- There’s no need to manage different loans or debts with the debt consolidation procedure.
- The overall interest rate will be much lower than usual.
- It will be easier for you to pay everything off much quicker.
- You can improve your overall credit score.
Mistake – 5: Not Having Any Idea About The Repaying Capacity
Many people apply for a loan without even assessing their repaying capability. Thus, when it comes to the EMIs, it becomes almost impossible for them to pay them on time.
Hence, if you want to avoid such a situation, make sure to learn about the following things beforehand:
- Is your lender offering a simple or a variable interest rate?
- How much time will you get to repay your debt?
We’d ask you to use a personal EMI calculator to calculate the amount you have to pay monthly. Remember, ideally, this sum of money should not be higher than 40% of your monthly income. Otherwise, it may hurt your credit score to some extent.
In the end, there are a lot of factors that go into getting approved for a loan. It’s important to do your research and make sure you know how much money you can afford to spend on a wedding before taking out any loans.
The best way to avoid these mistakes is to put in the time and effort upfront. If you know how much your credit score will affect interest rates, what kind of loan terms you should be looking for, or which lender might offer a better rate – then it’s less likely that you’ll make one of these common errors when applying for a wedding loan.
Do you know how to get a loan for a wedding with bad credit?
Krystle Cook – the creator of Home Jobs by MOM – put her psychology degree on a shelf and dived into a pile of diapers and dishes instead. She is a wife and mother to two rambunctious boys, sweating it out in her Texas hometown. She loves cooking, DIY home projects, and family fun activities.