Wedding Loans For People With Bad Credit

Updated: March 19, 2024 Author:

Key takeaways: Wedding loans are no different from personal loans, and you can certainly secure a personal loan with bad credit. If you have home equity, secured loans with bad credit may be more accessible.

    How to get a wedding loan with bad credit

    Resist the urge to apply for any type of credit without knowing your credit score, and the likelihood of being considered for approval. After being rejected for credit, information stays on file for up to 2 years. Most legacy lenders reject applications when there are court orders on your credit report. Missed payments and certain types of negative entries may be overlooked, but you need to get past the automated process to have your application manually reviewed. 

    After being refused credit, you can ask the lender to explain why you were rejected. This can pinpoint information on your credit report that’s causing applications to be denied. It can take up to six years before most entries come off your credit report. Check the date the entry was first recorded. The most weight is applied to the most recent entries. Information close to dropping off your files will still reduce your score, however, some lenders may be willing to overlook it, if it is due to be dropped. 

    For wedding finance, consider extending your engagement period, setting up a sinking fund with the money you’d be paying toward a loan and other types of finance, and use that to pay deposits to book wedding vendors and venues. 

    Different ways to self-finance a wedding with bad credit 

    No Guarantor Loans

    No guarantor loans can be suitable for people with thin credit histories, minor delinquencies, or aged entries due to be dropped from your credit report. Without a co-signer, there’s a higher risk to the lender and that’s reflected in higher proposed rates, lower borrowing limits, and shorter repayment terms. 

    Guarantor loans

    Guarantor loans are easier to be approved for. More so when your guarantor is a homeowner. That’s because they’re staking their home that you’ll repay the loan. If you don’t, the lender will stop chasing you for repayment, and instead chase the guarantor. The guarantor stands to lose more, so it’s more than likely a lender will get repaid when they threaten repossession of a property. With a co-signer, you can find that you’re eligible for a higher borrowing limit, more favourable interest rates, and get a longer time to repay the loan amount.

    Credit cards

    Credit cards are an ideal way to pay the deposits for venue bookings, caterers, photographers, florists, hair stylists, wedding dressmakers, and any other vendor you choose to use requiring a deposit over £100. Anything paid even partially on a credit card between £100 and £30,000 is protected under Section 75 of the Consumer Protection Act, provided you get a contract from the supplier. If any of your vendors fail to supply or show up on the big day, you may be able to raise a claim for breach of contract, or misrepresentation. Without a contract in place, it’ll be nigh impossible to claim.

    When working with credit cards for people with bad credit, there can be annual fees and higher interest rates. When budgeting for your wedding, consider how far out you can secure bookings, and pay it off asap. Every payment made on time helps to gradually repair your credit. Popular wedding venues and caterers can require 10 to 12 months’ advance notice to secure your date. It is possible to increase your credit score in 12 months, after which time, you may be eligible for better credit card offers, possibly with 0% balance transfers. How long it takes to repair bad credit depends on the severity of entries on file.

    Logbook loans / V5 loans 

    Logbook loans are a type of secured borrowing that uses a vehicle as collateral against the monies borrowed. Given the trade value of vehicles is much lower than what you paid, lenders typically don’t do credit checks. They will need to verify your identity but your credit score isn’t affected. You stand to lose far more than they do if you fail to repay the loan. The terms are generally up to 18 months, have a higher interest rate than mainstream finance options, and only provide up to 50% of the current trade value of a car, motorbike, van, or motorhome. If you need to raise funds for a venue or supplier deposit and can’t currently get accepted for a credit card, V5 loans may be an option to consider. The same “soft check” eligibility checker can be used for a range of logbook loan alternatives, which may provide more funding on better terms. 

    Remortgaging with bad credit

    Remortgaging can allow you to borrow more, repay over longer terms, and release some of the equity in your property. It will mean rolling the cost of your wedding into your mortgage, resulting in repaying far more in interest over the life of the mortgage. If you were to remortgage over 20 years, you’d be paying interest on the cost of your home and your wedding for the next two decades. Repaying a mortgage early is likely to incur penalty charges. Seek financial advice if you are considering this. 

    In extenuating circumstances when you NEED to get married, this may be worth exploring. An example of extenuating circumstances could be if your partner is a serving soldier, where the criteria for Service Family Accommodation is for a couple to be married. If you don’t want to settle for a registry office, then remortgaging could release funds to use for the wedding, then repay the loan when the home sells. Keep in mind the Early Repayment Charges (ERC) that could be incurred if you don’t intend to remain in the property for the duration of a fixed-term mortgage.

    Wedding Finance Options with Help from Immediate Family 

    Home Equity Line of Credit (HELOC)

    A Home Equity Line of Credit is another way to release equity tied up in your property. It’s relatively new to the UK finance industry so there are not many lenders offering this at present. Those that do require a good credit rating. If you have parents or grandparents with sufficient equity in their property and are willing to help with capital raising for your wedding, HELOC may be a discussion worth having.

    Equity Release

    Equity release is something to approach with caution because it has the potential to eat into the entire value of an estate, possibly wiping it out. At its most basic, it’s a way for parents and grandparents to pass on inheritance early, or for seniors wanting to use their equity for their wedding. Equity release is categorised as a Later Life Lending product. It is only available to those over 55 and is a regulated financial product requiring advice from a qualified equity release adviser. You can’t just apply for this like most standard finance products, mainly because, it’s anything but standard.


    How much can you borrow with a wedding loan?

    As wedding loans are unsecured, the maximum most lenders offer will be up to £25,000 with repayment terms of up to 10 years. For wedding loans with bad credit, the max loan amount is likely to be reduced to £10,000 or less, and repayable over 5 to 7 years. Terms vary and are based on your individual circumstances. 

    Does marrying someone with bad credit affect your credit? 

    For engaged couples living together, it may feel like a good idea to link your finances together, and then apply for a higher loan amount based on joint incomes rather than your sole income. Getting married doesn’t affect your credit score, however, linking finances together creates a financial association. That can affect your ability to have a joint mortgage application approved.