Can a Payday Loan Help You Finance Your Wedding?

Even modest marriage ceremonies and receptions can be incredibly expensive. Unless you’re independently wealthy – or unless you have really cool parents – you may be considering taking out a loan to pay for it all. But for some people, either their credit score, income level, current debt or other factors make it hard to get a traditional loan. You may be considering a payday loan, the standards for which are much more relaxed. But before you take out a payday loan to pay for your wedding ceremony, know exactly what you’re getting into.


Weddings are expensive – but recurring debt from payday loans can leave you in a much bigger financial hole.

The Lure of Payday Loans

As discussed in the article “How Do Payday Loans Work?,” payday loans seem very attractive to people who don’t have a lot of options. They generally don’t run credit checks – in many cases, you don’t even need a bank account. If you’re gainfully employed and have an address, they will – instantly, in most cases – either give you money or deposit it into an account. You sign a contract to pay it back – with interest, of course, same as any loan – and after a few installments, you’re all squared up. You can use that money to get your car fixed, deal with the flood in your basement or pay for your wedding ceremony.

Everything is great – until you read the fine print.

About Payday Loans

Payday loans are unsecured loans that are meant to be paid back right away. They generally range from $100 to $1,000. They often come with finance charges of between $15 and $30 on every hundred borrowed. A 15 or 20 percent rate would be pretty high in and of itself, although not as bad as many standard credit cards. But the fine print (this is often not listed in the FAQ section of the lender’s website) dictates that the APR (annual percentage rate) is often between 300 percent and 1,000 percent. Even the very wealthy could never afford those terms.

What it Means in Dollars and Cents

Let’s say you borrow $500 with a 17.5 percent finance charge at 400 percent APR (both of which are low for the industry, by the way). The loan would cost you $87.50 if you paid it back in full in two weeks (14 days is the normal loan term). If you renewed it only once, it would cost you $105 more.

This is the payday loan “trap” that so many people fall into when taking out these kinds of unsecured loans out of either desperation or ignorance of the risks.


Payday loans should be used for emergencies when there are no other options – not to finance events like weddings.

Payday loans should be a last resort for people with no options. The lenders who issue them have been criticized for preying on the poorest and least-informed members of society. Like pawn shops and liquor stores, payday loan outlets thrive in underprivileged neighborhoods. Their interest rates are so exorbitant that unless you pay it off completely right away, you can fall into the trap of debt that never even chips away at the principle of the loan for years to come on a relatively small amount of borrowed money.

Andrew Lisa is a freelance personal finance writer. He covers investing and borrowing.

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