Ideas & Advice

Should you take a personal loan for your wedding expenditure?

The answer to this question is a resounding ‘no’. Here are 4 reasons why.

Weddings are an expensive affair. They can cost an arm and a leg if you decide to get elaborate about the whole deal.

Some couples pre-plan and work towards financing the wedding, but in the absence of a wedding fund, the question of a personal loan may arise. Should you, or shouldn’t you?

After popping the question and getting a resounding ‘yes’, here is another tricky one for D-day: Should you take out a personal loan for your wedding? The answer to this question is a resounding ‘no’.

Here are 4 reasons why:

1. Loans for asset building only

Everyone, be it wise people or the grapevine, says that personal loans should be taken only if you plan to build an asset.

One of the biggest financial mistakes is borrowing money on interest for an expense. This situation has the ability to land you in the thickest of soups ever.

You end up having to return more money than you borrowed, after spending it all! A complete no-no.


2. High interest rates

UOB, HSBC, and Citibank offer the lowest rates of interest on personal loans in Singapore; with HSBC leading the pack at 9% EIR for a 3-year loan on a principal of S$10,000.

Given that interest rates for personal loans in Singapore are formidably high, it is wise to steer clear of any engagement that binds you to return way more than you intended to spend in the first place.


3. New life, new expenses

Another reason that screams ‘avoid a personal loan for wedding expenses’ is the fact that you are about to start a new life – one with multiple expenses already piled up.

Think your honeymoon, doing up your new home, welcoming a baby, or maybe even buying a new house.



4. No limit to wedding expenses

Weddings are endless sinkholes, expenses for which carry on and on.

You can always add an extra tier to your already humongous cake, or weren’t those expensive décor flowers always your favourite?

There is no end to the amount you can indulge yourself at your wedding; but remember that a wedding financed by a loan gives you a completely false sense of resources.



If you must take out a personal loan for your wedding, it should only be because the big day has been the biggest issue in your life – ever. We are talking indulgent stuff like a childhood fantasy, dream wedding, destination wedding, or because you just HAD to.

So, you have decided to take that loan; here are a few pointers that you must keep in mind. Apply for the loan only if you are completely financially stable.

Your checklist for financially stable status:

  1. You must have a robust credit history.
  2. You must have steady employment – no ifs and buts here.
  3. There should be minimal existing debt.
  4. You should have a healthy emergency fund.

Checks on all points mean that you will be in a good financial position when it comes to repaying that personal loan. Also, the rate of interest that you will be offered when taking out the loan will be lower. Get hitched but don’t ditch logic for emotion!


This article was first published in BankBazaar Singapore.