Are you all set to exchange your solemn wedding vows with the person you love the most? Congratulations! But, if you’re still unsure as to how you’ll manage the expenses for the big day, let’s assure you by saying that a wedding loan can easily solve your problem. A wedding loan is nothing but an unsecured personal loan that you use specifically to bankroll your wedding. In Singapore, you can use different types of personal loans or approach any one of the many reliable lenders for extra cash.
10 Cost-Effective Loan Options for Your Wedding
Despite your best efforts to minimise costs, you may realise that a wedding in Singapore is an expensive affair. While your credit cards can help you manage a portion of the overall expenses, you would still be in need for liquid cash. For an uninterrupted cash flow, you can consider one or more of the following options:
A thorough research and some basic considerations can help you narrow down your options and choose the most suitable loan for your wedding.
Things to Consider Before You Get Started With Your Wedding Planning
- Decide on Your Budget First: A wedding in Singapore can cost anywhere between S$35,000 and S$50,000. Start planning for one considering S$45,000 as the median. Know the most important expenses that you would like to get covered with a loan. Your wedding banquet, catering, bridal package and the engagement ring are the expenses that are usually considered to be non-negotiable. You can then start focusing on the other arrangements like flowers, decorations, and entertainment and see if you could reduce the expenses related to them, you could ask your friends to help with the arrangements rather than hiring professionals, or shop around to get the best deals. Once you know your budget, you’ll know how much you need to borrow.
- Do You Meet the Minimum Annual Income Requirement?: Most lenders set a minimum annual income criteria of S$30,000 ( some set it at S$20,000). You can’t apply for a loan if you don’t meet this requirement. Depending on your annual income, you may be lent up to 4-8 times your monthly income. DBS offers a loan up to 10 times your monthly income if you earn S$120,000 or above per year.
- Don’t Forget to Check Your Credit Score Before You Apply: Securing a loan for your wedding won’t be easy if you don’t have a good credit score. Before you apply for a loan, get your latest credit report from one of the CBS offices for a fee of S$6.42. This will help you understand what your current credit profiling and risk rating is. If your spouse has a better credit score and satisfies the TDSR requirement comfortably, you might encourage them to apply for the loan.
- Are You TDSR-Compliant?: The government of Singapore has created a framework under which a borrower can’t borrow any amount exceeding 60% of their gross monthly income. If you want to move in with your spouse in your own flat or condominium after marriage, and want to apply for a home loan, you’ll have to ensure that your wedding loan doesn’t disqualify you on the grounds of the TDSR requirement.
- Do You Need a Cosigner? Is Yes, Start Looking for One: If you don’t have a good credit score or if you need to borrow more than your lender is willing to lend, you may start looking for a co-signer or guarantor for your loan. However, you need to be extremely careful because if you default, the co-signer of your loan application may get into trouble. Ideally, your co-signer should have a good credit score. To ensure that everyone involved is on board, discuss the right repayment plan and tenure with your fiance and the co-signer before locking it.
- Have You Carefully Considered All Your Loan Options?: Instead of applying for a loan, you could also use a purchase payment plan arrangement available on most credit cards in Singapore or opt for in-store credit facilities, especially for expensive items like your engagement ring or bridal attire. Some of these credit facilities come with special features like interest-free periods, low interest during a promotional period, and flexible instalment payments. However, you should be careful with 0% interest loans. If you fail to repay the dues within time, not only will you see a sudden drop in your credit score but also a much higher debt burden because higher interest rates and penalty charges will be levied. Talk to all the stakeholders carefully before deciding whether you should apply for an all-purpose wedding loan or in-store credit facility.
- Take a Holistic View of the Deals That You Have Shortlisted: While looking for a low advertised rate of interest is important, it is not the only parameter that you should base your decision upon. In fact, the effective interest rate (EIR) gives you a better idea of the cost of borrowing since it not only takes the compounding effect of the loan into consideration but also the various administrative fees such as processing fees, annual fees, fee for change of loan tenure, and early repayment that add to the overall cost of borrowing. Do your research thoroughly and shop around to look for promotional offers and flexible terms. Make sure that you have carefully analysed all the clauses related to a special offer before you apply. Check our website for the best promotional deals and loan products available in the market.
- How Much Should You Ideally Borrow?: Before you apply for a personal loan to fund your wedding, you need to decide the amount you want to borrow. As discussed before, lenders in Singapore usually allow you to borrow up to 4-8 times your monthly income. However, you’ll have to do a detailed financial budgeting before you decide on the amount you can afford to borrow. Check your monthly cash flow – inflows and expenses. Remember, that after you move in with your spouse, if you haven’t already, there could be a change in your monthly cash flow. Don’t forget to account for that change when you apply for a loan.
- Don’t Forget to Check the Minimum Borrowing Amount: Most traditional lenders have a minimum loan amount for their products. This can vary from S$500 to S$1,000, generally. You can’t borrow lower than this amount. If you need to borrow less than this, turn to your family or friends for help. You might also approach a registered money lender although your cost of interest could be higher. However, it shouldn’t be a major concern if you aren’t borrowing a big amount.
How Marriage Preparation Programmes Can Help?
The Ministry of Social and Family Development (MSF) organises and arranges marriage preparation programmes, through its network of registered partners, for newly-weds and soon-to-weds. These programmes not only teach couples how to communicate more effectively but also to improve the other aspects of one’s conjugal life.Important money matters are also discussed in details. Joining such a programme could help you and your spouse understand how to save more money, how to choose the right debt instruments and investment products, and how to make a marriage work. Check the official MSF website for more information.
How to Reduce Costs for Your Wedding?
Don’t hire a professional photographer if you can rely on your friends
Don’t have a full bar when a soft bar can do
Outsource the bar supply
It’s okay not to have a 3-, 5-, or 7-course meal.
Trust DIY over an event planner.
Shop around for wedding promotions.
Choose your friends over a professional band for entertainment.
Rent a gown if possible
Don’t miss a chance for additional discounts.
Instead of spending thousands of dollars on a celebrity wedding photographer, you can easily reduce your wedding cost by asking a friend to do the honours of capturing the special moments. Borrow a good DSLR camera from a friend, if you don’t own one yourself and go clicking! Your friend probably won’t mind the additional responsibility.
Truth be told, alcohol can’t be the most important element of your wedding. If most of your guests are teetotallers, you can even skip it completely. Alternatively, have a soft or semi-soft bar instead of having a full, open bar. Serve champagne, beer, or wine with a cocktail at most. Have a friend with prior bartending knowledge? Why don’t you ask him to man the bar? That’s going to be way cheaper than getting a professional bartender/mixologist.
Caterers can charge a bomb if you ask them to stock the bar at your wedding. If possible, pay a small corkage to an outside bar or restaurant and procure the supply yourself. You can save a lot.
Your wedding isn’t about food or alcohol. It’s about the occasion and the chance to share your happiness with your close friends and family. Yes, serving good food is surely your way of thanking them for attending your wedding. But, if an entrée, a soup, a side dish, and a dessert or two can do it for you, is there any need to have a lavish spread? Just make sure that the food is filling and tasty.
If you want a small and intimate wedding, you can actually consider planning your wedding by yourself. It can seem to be a daunting affair but if you aren’t planning to make it the talk of the town, you can probably manage it on your own, with the help of your friends. Start planning early and approach the event logically. Maintain separate spreadsheets for budgeting, for drawing up the guest list, to create inventory lists, to create a list of your vendors, a list to easily track your supply chain/procurements, and a list to keep track of all the other lists that you have created! Wedding planners in Singapore are expensive. If you do it right, planning and hosting a wedding without an event organiser’s service isn’t impossible.
If you have time to shop around, cash in on the opportunity. Negotiating with your vendors will require some time because there can be a lot of back and forth before the final deal is sealed. Moreover, if you have time to look around, you may chance upon special rates and promotional offers. Since weddings are usually about high volumes, a special discount from a vendor can increase your savings significantly.
An evening of mirth and frolic is incomplete without songs, skits, and dance performances. But, do you really need an expensive wedding band or a professional pyrotechnician to entertain your guests? Probably not. You would probably find a bunch of talented performers in your own extended family and/or among your friends. All they need is a platform! Put them in charge of the entertainment department at your wedding and get ready to be bedazzled by their array of talents. And you can have all this without having to spend a fortune.
A brand new wedding gown can cost an arm and a leg. Instead of overspending on a gown and then getting sucked into a debt trap, it’s more sensible to rent a wedding gown from an online boutique like Wedding Crafters or Dream Wedding for less than S$1,000 (less than S$500 if you opt for a budget option) instead of blowing S$10,000 on a gown that you would probably wear just once in your life.
Sometimes, your vendors may offer you additional discounts if you advertise them for free. Usually, your florist, caterer, and photographer may agree to offer you such deals. All you need to do is place a vendor card on the tables reserved for guests or place a hoarding/billboard in a visible corner.
A loan alone won’t be enough to take care of your wedding costs if you don’t plan well in advance. Don’t hesitate to ask your friends and family members for money-saving suggestions or for help. When you do take a loan, plan not only for the wedding expenses that you can cover with it but also how you plan to repay it within the shortest possible time and with minimal inconvenience.