How to Borrow Money to Pay for a Wedding

Financing a wedding with borrowed money can be difficult, but you do have options.

Weddings are special for the bride and groom, but they are also expensive. Few people have enough put away in savings to pay for their weddings in cash. The reality for many people who need to pay for a wedding is that they will need to borrow the money from someone. Several options are available to those who want to borrow money to help pay for wedding costs.

Instructions

1. Ask family members for money. Depending on the resources available to each family and the cost of the wedding, the parents may be able to pool enough money to pay for the entire cost. If you borrow from family, you might avoid interest charges. When borrowing money from family, discuss what type of repayment schedule will be best for both parties, then write up a contract (that both parties will sign) to set the new payment terms in stone. Make sure you don't agree to a payment schedule that you cannot keep. Be realistic with yourself and honest with the family member who is loaning you money.

2. Charge most of the wedding costs to your credit cards. Depending on your current available credit limits, you might have to ask your lenders for an increase--this is easier if you have a good payment history and a low current balance--or apply for more cards. Unless your cumulative available credit is in the tens of thousands, this strategy will work best for a smaller wedding. Put the expenses on a rewards card to get the most out of your money. You might earn enough airline miles to get you to your honeymoon.

3. Take out a personal loan or obtain a line of credit form your bank. You might have to take out more than one loan or both a loan and a line of credit if you need a lot of money. The success of this strategy will depend on your credit history and how much the wedding costs. You might be able to get a lower interest rate on the wedding costs by using a loan instead of credit cards to finance the wedding. If you own a home, getting a line of credit on the equity will garner the most amount of money to pay for your wedding, assuming you have a decent amount of equity.

4. Combine money borrowed from relatives, loans, lines of credit and available credit limits. This will be the easiest way to finance a large wedding, because you are not relying on one single source to finance the event.

Tips & Warnings

• Try to save as much money as you can before the wedding. The more you save, the less you will need to borrow. This will not only reduce your bills after the wedding but will also save on interest if you are borrowing from a financial institution.

• Taking out a loan or using a credit card to pay for wedding expenses will increase the actual cost that is paid for the wedding in the long run. Interest will be charged on the amount spent for as long as it takes you to pay back the loan. The better your credit is, the lower your interest rate might be--which means less money you will pay overall.

• Don't borrow more than you can afford to pay back, especially if you are using a home equity line of credit to finance your wedding. If you miss too many payments, you can lose your home--and no wedding is worth that.

References

• MSN Money Central: Borrow from Family Without Guilt or Grief
• Smart Money: Loans Among Family Members
• Yahoo Finance: How to Finance Your Wedding

Resources

• Federal Reserve: What You Should Know About Home Equity Lines of Credit