Moneysupermarket has revealed that as of January 2018 the average unsecured loan for the cost of a wedding is £9,206. Is this really a wise use of the money or could there be other ways to ensure that you still have the perfect day?
According to its unsecured loans applications data, the cost has risen some 11% from 2017 when engaged couples looked to borrow £8,261. Londoners want to borrow more at £10,744. However with the average wedding costing £20,000 that still leaves a significant gap. The data also reveals that 60% of those taking out an unsecured loan for a wedding do not own a property, which is the highest level for two years, and seems to add weight to the latest trend of tying the knot over buying a house. But surely the money would be better used as a deposit for a house as opposed to one day?
In my case our wedding was paid for by us as we saved, we also bought a house and had two children. The time difference, 12 years. Yes 12 years we waited, as the other things were just more important. Our family helped out where they could, my parents paid for my dress and cake but everything else was down to us. So is it that people are just not prepared to wait and save that long any more, or are the expectations far too unrealistic. Or is an unsecured loan a very flexible solution that allows people the opportunity of achieving their dreams.
Obviously taking out a loan will impact upon your credit score, but if you have never borrowed before then this can actually work to your advantage when it comes to a mortgage. Lenders look at evidence of previous borrowing when assessing your suitability for a mortgage, so providing you manage the loan correctly there are no reasons that an unsecured wedding loan would be anything but positive.
Savings expert at Scottish Friendly, Calum Bennie said: “While tying the knot is obviously a monumental occasion in one’s life, it does seem remarkable that many people choose to spend big and do so while relying heavily on credit. Ultimately they are putting the, albeit unforgettable, experience of one day above saving for a home that could last a lifetime, but then again that’s what today’s society is like. Many young people, particularly in areas where house prices are way beyond their means, put the experiences of life such as an unforgettable wedding or adventure holidays above bricks and mortar. Indeed the Bank of Mum and Dad has played a big part in helping many young people on to the property ladder and perhaps a similar solution can be sought by less hard-pressed families to help with the cost of their children’s wedding. By having the foresight to take out an investment plan like an ISA or a bond when their children are very young could help them to prepare for the occasion. Paying monthly means the parent will hardly notice the money coming out and in 15, 18 or 21 years’ time, it will have built into a sizeable sum to help the child pay for the wedding day they dream of. There might even be something left over to help with house purchase!”