Why take out a “wedding loan”?
If your budget is insufficient, taking out a loan can help cover some of the costs. You could then prepare your wedding in good conditions and offer yourself the ceremony you have always dreamed of.
You and your future spouse wouldn't be the only ones considering borrowing.
There are no official statistics on how many couples choose this option, but according to Sofinscope and Le Figaro, nearly one in two couples decide to use a loan to finance their marriage.
The characteristics of a "marriage loan"
It is relatively easy to subscribe to a "marriage loan", because all banks and financial institutions offer this type of loan.
It is similar to classic consumer loans intended to finance studies, a move ... You do not have to provide proof of marriage, but this document may possibly allow you to borrow at a better rate.
Calculate the borrowing capacity
The APR (Global Effective Annual Rate) allows you to calculate the total amount you will have to reimburse. It includes all the costs associated with taking out a loan. This is a very effective tool for comparing the rates charged by banking institutions.
A loan simulation can also help you when planning your budget. By doing a simulation, you will be able to realize that you may be able to fulfill a wish that you thought you had to give up.
Choosing the right bank
Banks are generally not very inclined to grant "small loans" (around 5,000 euros), because these types of loans earn them less. The APR can therefore vary considerably from one bank to another. It is therefore essential to compare several offers, in order to choose the one that suits you best. The following example illustrates the discrepancies that can be seen in the amount to be repaid, due to the fact that banks offer APRs which can be very different.
The cheapest credit found on the market has an APR of 4.65%; the most expensive credit, an APR of 12.86%. Suppose you would need 5,000 euros to complete the financing of your wedding. The deadline for repaying the borrowed amount would be 48 months.
With an APR of 4.65%, the amount of the monthly payment amounts to 114.14 euros and the cost of credit is 478.72 euros.
With an APR of 12.86%, the amount of the monthly payment amounts to 132.06 euros and the cost of the loan is 1,338.88 euros.
For the same amount borrowed, there is a difference of nearly 1,000 euros. Hence the importance of choosing the right bank!
Should you borrow with your future husband?
It is possible that one of the future spouses decides to take out a "marriage loan" alone. In this case, he alone agrees to repay the loan. As long as the marriage has not been officially registered, the other future spouse, if he has not become a co-borrower, is not obliged to repay the loan in place of the borrower in the event of payment default.
However, a loan application is more likely to succeed if the future spouses show solidarity. They can also borrow more and at a better rate. The future spouse who agrees to be a co-borrower, on the other hand, undertakes to ensure the repayment of the credit in the event of default by the borrower.
You now know the important points to take into account to organize your wedding in the best conditions.
Celebrating a wedding is a once in a lifetime event! Do not hesitate to do a mock loan if you feel that your contribution is insufficient to organize the wedding of your dreams.
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