Should you take out a personal loan to fund your dream wedding?

Should you take out a personal loan to fund your dream wedding?

Prince Charming didn’t need to consider it but in real life, fairytale weddings may take a bit more than a pumpkin and some mice. It’s an expensive event; make no mistake, but should you go into debt to be royalty for the day?

We asked couples on both sides of the fence and here’s some of the things you might want to think about before saying “Yes” to the Debt.

The Camp who said I do… need a loan

Adrian and Stephanie wanted a simple wedding but Stephanie’s parents wanted a massive shebang. There would be many relatives – many of whom hadn’t seen their family for years and Stephanie’s folks wanted a good impression made. So they cut a deal: Stephanie’s parents would help repay the personal loan needed to fund the big wedding.
“Adrian and I wouldn’t have been able to pay for a personal loan on top of the cars, the mortgage, and since mum and dad wanted the extras; they agreed to pay.”

John and Pei Fern wanted to marry as they were in their thirties but between familial commitments and having lower level salaries; they were not able to save enough in time. “If John and I waited until we saved enough even for a small wedding; we’d have to wait until we were 45. We bought a small apartment and don’t have a car so we can afford repaying RM300 a month for the personal loan until it’s paid off.”

But it’s not just about the lack of money. Rakesh and Selena are well paid doctors and had a significant amount of savings but they took a loan to partially cover the cost. “I’ve always preferred having a significant amount in the bank for a rainy day.” Rakesh explained. “We could’ve paid for everything in cash but we wanted to save some of the money to keep should anything arise. I’ll have no problem repaying the loan in 3 years and in the event of any emergency, I’ll know I have money in the bank to deal with it.”

The Camp who said No

Reza and Nurul were adamant not to go into debt to get married. “I don’t need an RM3000 baju for the ceremony or a hotel reception. His mum cooked and I bought my outfit off the rack for RM550. I believe the money is better spent on our new home. We already have a mortgage, two cars and our parents to support: we cannot afford another loan.”

The situation was similar for Alvin and Jesrina. “We have a decent amount of savings but when Alvin proposed, we definitely didn’t have enough for a wedding. So though we got engaged, we set the wedding date 3 years later to save enough for it. We can’t afford another loan and we didn’t want to begin our married life in debt. We felt we could wait until then.” Jesrina explained.

The Wedding Loan Checklist

Taking on a loan for your wedding is a very personal decision and many people have differing views on it. The important thing though, is to ask, it right for you? Here are the considerations:

  • Can you repay it comfortably? You’ll most likely have a new home and perhaps two car loans to service. Can you really afford another loan?

  • Can you go forward with a smaller wedding without taking a loan? What are the repercussions of this? (Will mum give you the cold shoulder til the end of days? Will you have to serve guests Milo ais and Marie biscuits?)

  • Is anyone else chipping in? Taking a personal loan and borrowing money from friends and family will lead to additional problems – pick one debt avenue and drop the other.

  • What are your reasons? This is a very personal question. Think about why you are taking a loan (keeping up with the Joneses?) and ask yourself if it really is the right thing to do.

In the end, it’s your special day so do what’s best for you.

This was brought you by Diana Chai from RinggitPlus compares credit cards, debit cards, balance transfers and personal loans to help Malaysians get more for their money.