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What are the cheapest wedding loan interest rates?
Wedding loan interest rates currently start from 5.76% p.a. (comparison rate* 6.55% p.a.).
But the rate you get will depend on your risk profile. As we'll see in the table below, the rates can vary significantly even when it comes to what a single lender is offering different borrowers.
How much does a wedding cost in Australia?
The average wedding in Australia costs $40,700, according to a recent study by the Australian Bridal Industry Academy (ABIA). While many soon-to-be newlyweds stick to a budget, ABIA research found that couples typically blow their big day budget by up to 18%.
And averages being averages, some weddings will cost a lot more than that. ABIA’s Weddings’ Survey uncovered that Australians are willing to pay more than the average to celebrate their special day, as highlighted below:
| Total wedding costs | Percentage of couples |
|---|---|
Less than $20,000 | 24.4% |
Between $21,000 and $39,999 | 30.5% |
Between $40,000 and $59,999 | 23.5% |
Between $60,000 and $99,999 | 16.8% |
Over $100,000 | 4.6% |
What is a wedding loan?
A wedding loan is a personal loan that you can use to cover the cost of your special day. With a wedding loan, you borrow a set amount of money from a lender and repay it gradually (plus interest) over a fixed term. It can usually also be used to pay for other related expenses, such as your honeymoon.
Based on our analysis of wedding loan applications from Money.com.au, the average wedding loan amount is $14,035, with an average interest rate of 14.05% p.a.
With Australian weddings spanning from $20,000 to $100,000, it's no wonder couples often turn to financing options to make their dream day a reality. Whether it's for the engagement ring, the ceremony, or the honeymoon, personal loans provide Aussies with the flexibility to cover a variety of wedding expenses.
Wedding loans at a glance
- Loan amounts up to $100,000
- Loan terms from 1-7 years (the average personal loan is just under three years)
- Weekly, fortnightly or monthly repayments
- Loans are usually unsecured but there may be secured options
- Fixed or variable interest rates available
- Your interest rate will be tailored to you
How to find the best personal loan for your wedding
Just as you meticulously compare options when selecting a venue or caterer, taking the time to consider your wedding loan is equally important. After all, this financial commitment will play a significant role in shaping your postnuptial repayment costs. Here’s what you should keep an eye out for:
Interest rates
Watch out for what can be deceptively low wedding loan rates you’ll see advertised. Those rates are rarely what borrowers actually get. You’ll need to compare options based on quotes tailored to you. And your other half if it’s a joint loan. Tailored rates will depend on your credit score, income, employment status and other factors.
Fees & charges
The main fees to be mindful of are loan establishment and application fees as well as ongoing fees (annual and monthly). Other costs include extra repayment fees charged by some lenders if you repay more than the minimum, or an early payout fee if you pay off the loan before the set term is up.
Loan term
In terms of desired duration, a wedding loan is the opposite of a marriage. You want your loan term to be as short as possible. The shorter your wedding loan term is, the less you’ll pay in interest and ongoing fees overall.
Flexible repayment options
Look for a wedding loan that allows you to make repayments weekly, fortnightly or monthly. Being able to make extra repayments on the loan and pay it off early without penalty can also be beneficial. Ideally you want the freedom to make a quick ‘divorce’ from your loan to save on interest. This will also make it easier to refinance your personal loan down the track if you find a better deal.
Who’s eligible for a wedding loan?
You can apply for a wedding loan in Australia if you are:
- Over the age of 18
- An Australian citizen or permanent resident
- Employed or have a regular source of income
These are the most basic eligibility criteria for a wedding loan. If you meet them, you’ll also need to demonstrate that you’re able to meet the repayment schedule over the term of the loan.
How to get a wedding loan in 7 easy steps
Knowing weddings, the process of getting your finance lined up may well end up being one of the more straightforward parts of planning your big day.
Here’s what’s involved:
1
Compare loans tailored to you
2
Do a free credit score check in advance to ensure you’re in a good position
3
Submit a personal loan application to the lender online
4
Provide any supporting info requested (e.g. payslips, bank statements)
5
Wait for your loan application to be assessed
6
If you're approved, sign a loan contract
7
The loan funds will be transferred to your nominated bank account
The whole process from start to finish may be completed in 1-2 business days. That’s if it’s a straightforward application. For more complicated applications, like a bad credit personal loan or a low doc personal loan for self-employed borrowers, the process will likely take a bit longer.
Fixed vs variable rates: Key considerations
Variable rate wedding loans
A variable rate wedding loan can come with ups and downs, but offers more flexibility.
Your lender could put your interest rate up, which would mean higher repayments. But your interest rate could also go down, meaning you pay less.
You generally get more flexibility with a variable rate wedding loan. For example, being able to repay the loan early.
Fixed rate wedding loans
A fixed rate wedding loan offers more certainty, but can be more restrictive.
Your rate and repayments will stay the same for the full term. If interest rates go up, you’re protected. But you won’t benefit if rates go down.
You also generally have less flexibility to pay off the loan early.
Secured vs unsecured wedding loans
The other option you may have is whether to get a secured or unsecured wedding loan. Unsecured wedding loans are much more common. You usually only get secured loans for purchasing an asset, like with a car loan, motorhome loan or boat loan.
BUT it can be possible to get a secured loan where a different asset you own is used to secure it. This could be your home, a vehicle, shares or cash savings. If you can’t repay your wedding loan, the lender can sell your asset(s) to recover its costs.
The advantage is you can generally get a lower interest rate on a secured wedding loan compared to an unsecured personal loan.
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