A wedding is a time of great excitement. Whether you’re having a small, intimate gathering or a large celebration, planning the day of your dreams can be joyful and fulfilling. You may also be wondering how to afford your big day, especially as your big-ticket costs (like a photographer and fresh flowers) and smaller items (like favors and thank-you notes) start to add up.
Borrowing money is one way to pay for your wedding. With a wedding loan, which is a personal loan from a lender, bank or credit union, you could get the money you need with predictable monthly payments and set terms. But once your big day is over, you may be thinking about how you can pay off your loan quickly without upending your finances.
Keep reading for some tips on how to pay off your wedding loan as soon as you can.
Review your finances
Your first step is to take a hard look at your overall financial situation. How much money do you have coming in every month? Where is it going? Can you make any changes to your spending to pay off your wedding loan sooner rather than later?
List all your expenses for the past few months, including your rent or mortgage payments, utility bills, savings and nice-to-have purchases like entertainment and dinners out. Once you’ve collected all this information in one place, organize it into categories, like food costs, commuting expenses and household bills, to have an even better understanding of where your money is going and how you might adjust your spending to pay off your wedding loan sooner.
Remember that some lenders may charge a prepayment penalty for paying off your loan early. If you’re planning to repay your wedding loan ahead of schedule, be sure to check whether your lender charges a prepayment penalty, and if so, how much it is. That way, you can factor the additional fee into your budget if necessary.
Rework your budget
Even a short-term shift in your spending habits might help you pay off your wedding loan more quickly. Adjusting your budget could also help you free up money in the future to put toward your long-term financial goals. Some common approaches to budgeting include:
- The 50-30-20 method: 50% of your income goes toward needs (like groceries and car payments), 30% toward wants (like dining out and entertainment) and 20% toward savings and paying off debt. You can always adjust these percentages for your situation. For example, perhaps you want to put more of your income toward debt repayment until your loan is paid off.
- Zero-based budget: At the start of each month, assign all your income a role with a dollar amount until you get to zero, including utility bills, gas for your car and your savings.
- Envelope method: Decide how much you’ll spend on different categories, like commuting and dinners with friends, throughout the month. Put that amount of cash into envelopes for each category. You’re only allowed to spend what’s in the envelope until the following month.
You could also consider putting any monetary wedding gifts from friends and family toward paying down your debt. While it may not be as fun as using the money for a honeymoon or new items for your home, it could benefit your finances in the years to come.
Consider the best way to manage your debt
If you’re juggling other types of debt, like credit card payments, it can be difficult to know where to start. In this case, you might consider two popular debt management strategies to pay off your debt faster, including your wedding loan:
- Debt snowball: With this method, you pay off your smallest debt first, followed by the next smallest debt. Then, you use the money you’re saving from paying off the first debt to make larger payments on the second debt. Continue this cycle until your debts are paid in full.
- Debt avalanche: With a debt avalanche, you focus on paying off the debt with the highest interest rate first. Once you’ve paid off that debt, you’ll do the same for the debt with the next highest interest rate. Use the money you’re saving from paying off the first debt to make larger payments on the second debt. Continue until your debt is paid in full.
If you’re struggling to manage your wedding loan on top of your other debts, you could always look for advice and guidance from a financial advisor or counselor. See if there are any non-profit or low-cost advisors near you by dialing 211.
Take on extra work
Sometimes, the best way to make a dent in your loan payments is to take on extra work. Whether part-time, freelance, consulting or gig work, there are a number of options available. Think about your skills, how much spare time you have and what kind of activities you might enjoy doing, such as dog walking, teaching a musical instrument, building websites for local businesses or taking on graphic design projects for someone in your network.
Paying off your wedding loan quickly is possible
Paying off your wedding loan may be a big undertaking as a new couple, but don’t worry — there are a number of approaches to quickly paying back what you owe. Taking a hard look at your finances, reworking your budget, finding a new approach to managing your debt and potentially taking on extra work are all possibilities. You may even consider some combination of these methods to move the needle on your loan.
Be open to adjusting your finances for a time, get creative and approach the loan as a partnership and you’ll find a solution that works for you.
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