Wedding loans are a popular trend, but not cost effective - NBC12 - WWBT - Richmond, VA News On Your Side

Wedding loans are a popular trend, but not cost effective

Before tying the know, don't get tied down with debt. (Source: Pixabay) Before tying the know, don't get tied down with debt. (Source: Pixabay)
(WWBT) -

Couples are spending so much money on their weddings that a new business is starting to boom.

The average wedding in America now costs more than $35,000, not including the honeymoon.

A lot of couples are turning to personal loans to cover that expense. But before taking that option, there are some things to think about.

Data show the bride's parents still cover a big chunk of most weddings, contributing about 44 percent of the budget on average.

The couples themselves now pay more than 40 percent of their own wedding bills, which is why wedding loans are so popular. The math shows those loans are not cost effective in the long run.

If you borrow $20,000 for a wedding and pay it back over 10 years with 10 percent interest. That's a $264 monthly payment for 10 years, and you will pay an over 50 percent of the initial loan - $11,000 - in interest charges.

That's a decade of loan payments and a fortune in interest for a one-time event.

That only slows down reaching other financial goals, such as paying off student loans or saying to buy a house.

Other options are extending the engagement to save more money for the wedding or scaling back spending on the arrangements and doing a lot of the work yourself.

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