Weddings are supposed to be special because they signify entry into a new phase of life. This is the main reason why family and friends gather to feast and award gifts to the newly wedded couple. Nowadays, it seems apparent that the quality of one’s wedding largely depends on the available budget.
A couple that really wants to have their dream wedding despite a shortage of funds can find solutions in either payday or wedding loans. Wedding loans are relatively new credit options compared to payday loans that have existed for over a decade.
If you’re planning to seek credit financing for your wedding, take a look at the pros and cons of both payday loans and wedding loans.
If you both lack sufficient credit scores to borrow a loan from any commercial bank, you can rely on payday loan lenders who do zero credit report checks. The lender will require valid proof of income in order to claim repayment once your paycheck arrives. Applying for a no-credit-payday loan won’t affect your current credit scores unless you default.
Payday loan services have existed for over two decades in certain federal states. The widespread demand led to creditors establishing online-based platforms where borrowers can apply and obtain payday loans within the same day.
Payday loan lenders can charge interest rates that are 100 times more than what commercial banks charge. In addition, borrowers have to repay the debt within a short duration, usually not more than three months. If the couple lacks enough monthly income, payday loan repayment can lead to further debt.
Payday loan lenders understand the high risk involved in lending capital to individuals with unconvincing credit histories. In order to discourage the debtor from making late payments, the payday lender imposes high fines. If the married couple spent all their savings on the wedding, they will run into serious money problems due to delayed loan repayments.
The average interest rate levied on wedding loans is 35 percent. You’ll save a lot of money by borrowing a wedding loan compared to payday loans that can carry interest rates as high as 300 percent.
Commercial banks and certified credit providers must adhere to the government’s credit lending policy. This requires them to charge affordable interest rates and provide borrowers with reasonable loan repayment durations. Some lenders allow borrowers to repay their wedding loans within six months.
It’s almost impossible to acquire a wedding loan if either you or your fiancée have credit scores below 700.
Wedding loans are more affordable compared to payday loan lenders due to the affordable interest rate. The repayment plan suits newly wedded couples that have freshly graduated from college and hold entry-level jobs that offer modest incomes.