Wedding loans in the UK: a complete guide

Weddings are expensive. They’re also not something people like to skimp on: it’s your big day, something you’ll hopefully do only once, and a unique chance to have all the people you care about under one roof.

As a result, weddings can easily run to tens of thousands of pounds, and they often coincide with other big expenses – if you’re getting married, you’re probably also moving in together, hoping to take a honeymoon and might be thinking about starting a family.

So it’s no surprise that many people consider financing options for their wedding. This ranges from putting the cost of your wedding suit or dress on a credit card, to taking out a personal loan to fund the whole amount.

In this article, we’ll look at how you can finance a wedding, looking at the pros and cons of each option and covering key things to look out for.

We’ll go into a lot of detail here, but If you’re looking for a flexible personal loan of £1,500-12,000 to finance your wedding, you can skip the article and take a look at our loan calculator or make an application at www.koyoloans.com. Representative APR 27%.

If not, read on!

Can you get a loan to pay for a wedding?

Absolutely.

In fact, you can generally use a personal loan to pay for anything you want, however, there are two important caveats:

1. You must be clear with your lender about what you’re borrowing for when they ask you. Some lenders have restrictions (e.g. not all lenders provide debt consolidation loans) – and it’s important to be honest and transparent when filling out an application.

2. Unsurprisingly, lenders won’t allow you to borrow money for anything illegal, or for activities such as gambling.

While providers will generally be comfortable with a wedding as a loan purpose, they will want to be comfortable that:

• You have a track record of repaying debt in the past

• You earn enough to be able to comfortably afford repayments

We’ll cover those in more detail below.

Is it common to take out a loan for a wedding?

Paying for a wedding is a fairly common reason for a personal loan.

How you pay for a wedding is a deeply personal thing. Some weddings are self-funded, other couples take out financing, and in some cases, the couples’ families may cover some or even all of the cost.

Estimates vary, but the average cost of a wedding appears to be in the tens of thousands – many surveys we’ve seen put it at around £20-30,000. That’s a significant sum, and it seems reasonable to assume that many couples cover a significant portion of that amount with borrowing, whether that’s a credit card or personal loan.

What can you use a wedding loan to pay for?

If you take out a personal loan and indicate that it’s for a specific purpose (e.g. a wedding), you have a responsibility to the lender to use it for that purpose. So, for example, you shouldn’t take out a wedding loan and then use it to make home improvements or vice versa.

The exact terms of that agreement will depend on the wording of your loan contract and the type of loan you apply for, but you can expect that it will cover any cost reasonably linked with a wedding. That could include:

• Venue hire

• Food and drink on the day

• Invitation printing

• Band/DJ hire

• Flowers for decoration

• Staffing of your wedding, if not included in venue hire

• Audio equipment hire

Strictly speaking, you shouldn’t use a wedding loan to pay for a honeymoon – although some loan providers are relaxed about how closely you stick to your loan purpose, so it’s worth speaking to your lender about eligibility if you’re in doubt.

Below is a guide to help with your budgeting. Do bear in mind though, that the costs can vary hugely, depending on things like how many people you plan to invite, the quality you want, and when you plan to get married (e.g. summer bank holidays will often be more expensive).

Source: data on average costs from www.weddingplanner.co.uk

Can you get a wedding loan with a bad credit score?

The short answer: yes, but you’ll have less choice and will have to pay more.

The longer answer: your credit score is a number that reflects your credit history. When considering whether to write you a loan, most lenders will look at your credit history, and use this as one of the key factors in their decision.

In general, borrowers with a good credit history (and therefore a good credit score) will find that they’re able to borrow from more lenders and do so at a lower rate. They’ll also be able to borrow larger amounts.

Unfortunately, borrowers with a bad credit score will usually find it hard – though not impossible – to find a wedding loan, and are likely to have to pay a higher rate of interest.

Not all lenders focus on your credit history when making a lending decision though – read on for a guide to Open Banking lenders.

How can you get approved for a wedding loan?

If you’re worried about not having a good enough credit score to get approved for a wedding loan (or indeed any type of loan), there are two options you can consider:

Consider an Open Banking loan

When you apply for a loan via an Open Banking lender, you give the lender permission to securely view your bank account data.

Using that data, Open Banking lenders can view your income and outgoings, giving them a precise view of how affordable a given loan is for you. Believe it or not, most lenders can’t see this information, which is why they’re so reliant on your credit history when deciding whether to approve a loan.

As a result, people who haven’t yet built up a good credit history (for example, people who have recently moved to the UK, or who simply haven’t needed to take out a loan before) may find it easier to take out an affordable loan with an Open Banking lender.

For more information, take a look at our full guide: Open Banking explained.

Improve your credit score

Making a significant improvement to your credit score can take years, but there are also a few simple actions you can take right now which may boost your score.

The Money Advice Service has a great guide to improving your credit score, and two suggestions can have a quick impact:

1. Get on the electoral roll. This is one of the first things that lenders check – you can sign up on the Government website.

2. Check your credit file for mistakes. Credit agencies (Experian, TransUnion and Equifax) all allow you to check your credit file for free. If you spot a mistake and tell them about it, they’re required to fix it, quickly.

For more information, we have two other guides that might be useful: does a personal loan affect my credit score, and, should you be rejected for a loan, reasons for personal loan rejection.

How do different wedding finance options in the UK compare?

In this section, we’ll compare a few different options for financing a wedding in the UK. Unlike car finance, which has many different options, each with its own pros and cons, there aren’t really any specialist products designed for wedding finance, which makes this section pretty straightforward.

Personal loan

A wedding is a common reason for a personal loan.

Most of us know how unsecured personal loans work: borrow a lump sum, and then pay it back – with interest – over a series of monthly repayments, usually via direct debit. The interest rate is fixed, so you know exactly what your loan repayments will be.

• Pros: fixed repayments, can borrow a large loan amount (depending on your personal circumstances and credit rating), loan term can be several years.

• Cons: can be more expensive (higher interest rate) than some other forms of credit

For more information, see our guide to what is a personal loan.

Credit cards

Rather than borrowing a fixed amount, credit cards allow you to spend up to a specified limit (e.g. £2,000). At the end of the month, you have the option to either repay the balance or carry it over, in which case you’ll pay an interest rate.

• Pros: so long as you pay it off in full each month, you can usually avoid making any interest payments

• Cons: if you go beyond that period, you’ll usually face a high rate of interest (higher than a personal loan). Maximum limit is usually pretty low (in the low thousands) when you first open a credit card.

Store or supplier credit

It’s possible that one or more of your suppliers will be prepared to offer you some form of credit, particularly on major purchases. For example, your venue may offer to take payment in instalments over the year, after an upfront payment which acts as a deposit. Repayment terms and any interest charged will vary by supplier.

• Pros: can be a low-cost way to spread the cost of major purchases (e.g. venue hire)

• Cons: usually relatively short term (less than one year) and can’t be used other purchases

Overdraft

An overdraft isn’t specifically designed to fund a wedding but can be useful nonetheless – depending on your financial circumstances, your bank or current account provider may offer you an interest-free overdraft facility with no fixed repayment period, which you can dip into in order to pay for some wedding costs.

• Pros: usually interest-free, can be repaid whenever suits you – no monthly payments

• Cons: usually only covers a few hundred to a few thousand pounds, so unlikely to cover the total amount required for a wedding.

In practice, credit cards, overdrafts and store credit might be useful for smaller purchases, but to cover the cost of a wedding with a cost of more than £5,000 or £10,000 (depending on your circumstances), a personal loan is likely to be the only option which allows you to borrow a large enough amount.

What happens if you have to cancel your wedding?

If your wedding is cancelled, unfortunately, you’ll still have to pay your lenders and suppliers back in full. This is where wedding insurance comes in: many couples take out insurance so that if their big day is cancelled, they’re financially covered.

In practice, during the lockdowns resulting from coronavirus, many suppliers had a flexible policy allowing bookings to be pushed back. So although loans still had to be repaid, couples didn’t lose out financially, since they were able to get married on a different date.

Nevertheless, insurance can be worth considering, especially when there’s so much at stake for your perfect day. Believe it or not, there’s even such a thing as rainy wedding insurance!

Summary: how to get a loan for a wedding

Hopefully, this article has covered everything you need to know in order to get the right financing for your dream wedding. If there’s anything else you’d like to know though, let us know in the comments section below.

And if you’re looking for a flexible personal loan of £1,500-12,000 to finance your wedding, you can take a look at our loan calculator or make an application at www.koyoloans.com. Representative APR 27%.