Wedding loans becoming popular option for financing special day
SEVERN, Md. — “I did love my dress.”
“Was it worth the expense? I don’t know.”
Like many brides, Alexis Montejo saw a big price tag for her big day. She took out a loan to finance the $20,000 affair.
“We did save a little bit but it wasn’t as much as we should have.”
The cost of a wedding has climbed to an all time high. The national average is just north of $35,000 and wedding loans are becoming an appealing option.
“I think one of the reasons they’re becoming popular is because the lending opportunity is so easy for people they’re able to apply online,” said Prosper CEO David Kimball.
Prosper is just one company that offers wedding loans between three and five years. The interest ranges from five to more than 35 percent depending on the individual.
“The best way to pay for a wedding is to use what you have in your savings account already.”
Stefanie O’Connell helps millennials manage their finances.
“Are millennials trying to one up another when it comes to weddings?”
“It doesn’t help to come of age in the Instagram social media generation,” O’Connell replied.
O’Connell advises couples to extend their engagement before over-extending their budget. But if you you opt for a wedding loan don’t take on interest higher than seven percent and have a payment plan.
“Going into debt to start your married life can be a really painful trade off in the long run.”
That’s exactly what the Montejo’s are learning.
“Are you happy you took out a wedding loan? No, why not?”
“Because we’re in debt.”
The loan helped make one day special, but it will take years to pay off.