Loans

Wedding loans in Canada: financing your big day

Nothing like a helping hand to make one of the most important moments in any case's life even more magical. Understand everything you need to know about marriage loans in Canada.

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by Jose Goncalo

Published on 07/19/2022

Get the money you need for your dream wedding

Wedding couple making a heart symbol
Love is beautiful! But sometimes it can be very expensive! Understand how wedding loans work. Source: Pixabay

In fact, there is no better way to seal a love story forever than with a wedding. However, a marriage worthy of the size of your love can be expensive. Well, that’s exactly why wedding loans in Canada exist.

In this article, you will know how to get this type of loan. So, stay with us and discover how to be closer to realizing your dream.

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Can you get a loan specifically for weddings? 

In fact, many lovebirds go to banks and credit bureaus to get a loan to finance their wedding. There, they discover a very curious fact: wedding loans don’t exist!

Before you leave this article, crying and thinking it’s all over, calm down. In fact, what companies sell as “marriage loans” are ordinary personal loans.

So it’s important to know that being married will not increase your chances of getting a loan. In fact, the same criteria will be analyzed that would be observed to approve a normal loan.

How much can you get for a wedding loan?

In fact, so-called “marriage loans” in Canada tend to have the same limit as traditional loans. So most of them tend to be in a range that can go from $100 to $50,000.

In addition, the payment term is also usually quite varied. On average, these can last from 6 to 60 months. However, many couples prefer to opt for shorter payment terms. In fact, this is a good idea.

After all, the faster you pay off your loan, the less interest you will have to pay. Before planning a party that costs a few tens of thousands of Canadian dollars, a word of caution.

The vast majority of people are not eligible for the higher loan amounts. In fact, this will depend a lot on attributes like your credit score.

According to Loans Canada, a person with bad credit can even get loans of larger amounts. However, it would have to agree to pay interest of up to 47.72%, which is considered extremely high.

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What is the difference between a regular loan and a wedding loan?

How to solve the financial problem of lovebirds in love. Source: Adobe Stock

In practice, there is no difference between a “marriage loan” and a conventional loan. In fact, wedding loans in Canada are just one way that lending companies have found to offer loans to lovers.

Therefore, you need to meet the same criteria as someone seeking money for any other purpose. Unfortunately, the size of your love is not considered a criterion for releasing a loan.

Instead, other attributes are noted. So, for you to get better loans and lower interest rates, you should:

Improve your credit score

This is a basic criterion for whether or not you are eligible for a loan. So, before applying for a loan, implement practices to improve your score.

Not sure how? Then click on the link below and find out:

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Do not have debts

Before going to the credit bureau, reduce your debts. If your lender understands that your current debts are already taking a heavy toll on your income, they will not approve you for a new loan.

Offer security to the lender

In extreme cases, you can offer an asset (car or property) as insurance for your loan. In these cases, credit companies were more confident in offering better loans.

Also, many lenders tend to look at your income and debt-to-income ratio in addition to your credit score. So, to avoid rejections, make sure with your lender what criteria they will analyze.

Finally, remember what the acceptable interest rate is for your Canada wedding loans. In fact, most subject matter experts tend to classify 36% as a very high-interest rate.

So always try to trade smaller amounts.

Is it worth doing a wedding loan? Learn the pros and cons

Decor and table set for a beach wedding
Is it all worth it when making your dream come true? Discover the pros and cons of taking out a loan to finance your wedding. Source: Pixabay

In fact, before making this commitment to a bank, it is important to weigh the advantages and disadvantages.

After all, just as a marriage is not forever a “bed of roses”, Canadian wedding loans also have a downside.

Below, check out the main advantages and disadvantages of applying for this type of loan:

Pros

  • If approved, you will receive the money quickly in your account;
  • Once you have the money, you can use it however you want: flowers, photographers or an unforgettable honeymoon? You’re the boss;
  • In most cases, you will not need to offer your goods as insurance;
  • Generally, you have access to lower interest rates on a loan than if you decided to buy everything on your credit card;
  • It is possible to find loans with fixed monthly fees, so you don’t have surprises in the future;
  • You can set up a party as you’ve always dreamed of.

Cons

  • A loan will generate a higher monthly expense. That money could be invested in a house, a car, travel, or anything else;
  • You won’t always find good loan rates and conditions;
  • In some cases, you will have to pay a penalty if you decide you want to pay your loan early;
  • Debt is one of the biggest reasons for divorce in Canada and anywhere in the world. Thus, it is interesting to avoid this risk.

Now, take the advice of someone who got married a year ago on a very tight budget and without much wealth. True love can turn any simple party into an unforgettable event.

Finally, since you are planning a wedding, having a budget can help a lot. Click on the link below and read an exclusive article on how to set up a good budget.

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Start budgeting: 5 simple steps on how to start!

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