My Fiancé Wants to Take Out a Small Loan for Our Wedding. Is This a Bad Idea?

Do you have a pressing financial question where you could use a bit of expert help? Email moneyeditor@purewow.com. We’ll be answering money-related questions on the regular via this new column and tapping a network of advisors known for their sound wisdom and expertise. Today’s expert is Lauren Anastasio, Wealth Advisor at SoFi and a Certified Financial Planner.

“My fiancé wants to take out a small loan for our wedding (and the ring), but I’m hesitant. Is this a bad idea?”

Talking about money is difficult, so discussing it in the context of a wedding is bound to stir up emotions. How you choose to finance it is ultimately up to you and your fiancé, but the most important thing is that you’re on the same page.

As you consider a personal loan, you need to first have a conversation about how much debt you’re willing to take on—and also how you plan to prioritize paying the loan back.

Sure, a personal loan is a way to get quick and easy cash, and if your plan is to wait for marriage until you’ve saved enough money, a personal loan could help you get there faster—or help you have the wedding of your dreams. It’s also a smarter bet than adding credit card debt, since a personal loan is better for your credit and often times comes with a better interest rate, overall. 

Just keep in mind: There’s a strong possibility that taking out a personal loan could cause you to spend more than you otherwise would. For example, many couples would be thrilled with a one-carat diamond ring, but find themselves springing for two-carat, once the extra money “magically” appears. Ditto for all the other wedding bells and whistles. Ask each other: Is a monthly payment for the next three to seven years worth the extra frills, or do you think you could derive just as much enjoyment with a little DIY effort?

It’s also worth noting that money is one of the most common topics couples fight about, and taking on extra debt at the outset of a life partnership can put undue stress on the relationship.

If you and your fiancé do decide to move forward and take out a loan, talk it through in detail and make repayment a priority. Discuss how much you’re willing to borrow and the monthly payment amount you’re comfortable with each month. (Factor this payment into your other monthly expenses in relation to your income and what you can afford.) Next, sit down and map our your detailed repayment approach, so you both have it in writing and won’t be surprised when the bill comes due.

The best way to pay off the largest chunk of your loan? With any money you receive as wedding gifts. It can be tempting to put this cash toward things like the honeymoon or those Danish candlesticks you’ve got your eye on, but remember that the longer you borrow money, the more the loan will cost you. That cash windfall from the wedding will only happen once. Use it wisely.