On average, couples spend $4,000 on a honeymoon, according to the 2018 Newlywed Report from WeddingWire.
That may seem like a drop in the bucket compared to the money you’ll spend on the wedding and reception, but it’s still a pretty good chunk of change.
For some couples, a honeymoon loan seems like a financially manageable way to cover the costs of an extravagant vacation. But a loan may not be your best option.
Mackenzie Richards, a senior financial consultant with BankRI Investment Services, said, “[The honeymoon] will come and go rather quickly, and you will be left with ongoing debt payments.”
Before you decide to borrow money to pay for your honeymoon, here’s what you need to know.
What’s a honeymoon loan?
When you borrow for a honeymoon, you get a personal loan and use it to pay for expenses related to your trip. In fact, some lenders list “honeymoon” as a reason for a loan. Of course, you can use a personal loan for any purpose, regardless of what you listed on your application.
“As with any loan, it’s important to assess your ability to repay the amount within the loan terms,” said Jennifer McDermott, a consumer advocate with comparison website Finder.com.
Make sure you can handle the monthly payments for your honeymoon loan. Use our personal loan calculator to estimate what you might pay each month for two years on a $4,000 loan:
For some couples, McDermott pointed out, a loan is worth the cost. If you’re comfortable paying $229 in interest and making payments for two years, you can take a great honeymoon without saving up.
When deciding on a honeymoon loan, McDermott said to consider the following terms:
- Fees (including origination costs)
- Interest rate (fixed or variable)
- Term length (many personal loans have terms between two and five years)
- Prepayment options
McDermott also suggested comparing personal loans from different lenders to see where you can get the best deal. Your offers will depend on your credit and income, as well as your term length.
However, McDermott and Richards both suggested there are alternatives to using a honeymoon loan.
Alternatives to a honeymoon loan
Rather than spending extra money on interest, see if there are other ways to pay for your honeymoon. Consider the following four alternatives to save hundreds — or even thousands — of dollars on your honeymoon.
1. Save up for your honeymoon
According to the most recent Real Weddings Study from The Knot, the average engagement lasts 15 months and wedding planning takes 12 months for most couples.
That gives you some time to save up for the honeymoon. Even if you can’t save for the full cost of your honeymoon, setting aside a little money could help you avoid a large loan.
If you set aside $200 a month for a year, you could end up with $2,413, assuming a 1.20% annual yield.
Open a bank account designed to pay for your honeymoon, and decide how much you can set aside each month until the wedding. You’ll have a decent amount saved up, and you might not even need a honeymoon loan.
2. Go on a small trip and plan a bigger one later
“Many people will take a ‘mini-moon’ for a few days to just clear their heads,” said Richards. “They begin planning a longer trip for the following year once things are a little calmer.”
Your mini-moon can be as simple as driving a short distance from your home and renting an inexpensive Airbnb for a couple of days to unwind. When I married, our short engagement didn’t allow us time to save for a wedding or honeymoon. We enjoyed two mini-moons:
- A daytrip to New York City following our reception in upstate New York
- One night in a themed bed-and-breakfast following our reception in Idaho
We spent a total of about $350 on our mini-moons, had a great time decompressing from the wedding bustle, and were glad we didn’t go into debt for a fancy trip.
3. Use rewards credit cards
Consider using a cash-back or travel rewards credit card to help pay for your honeymoon. You can put expenses on a rewards card and pay them off at the end of the month to avoid accruing interest. Then, use the points you earn to pay for part of the honeymoon. With the right strategy, you could amass enough rewards to pay for airfare or accommodations.
Another strategy is to get a new credit card with a no-interest introductory period on purchases. You could then charge your honeymoon to the card and pay it off before the promotional rate ends.
“Credit card use can be a good approach for some,” said Richards. However, he warned that discipline is important. If you start spending without a plan and carry a balance, you could end up over your head in debt.
4. Get other people to pay for your honeymoon
“Wishing wells are a rising wedding trend that bucks the tradition of guests purchasing gifts via a registry,” McDermott said. “Instead, they bring cash on the day or contribute to a fund that has been set up prior to the big day.”
If you make it clear ahead of time that you’re not interested in things and you provide a place for people to send money, you can raise the funds for your honeymoon without resorting to a loan.
McDermott said some travel agents can facilitate this effort. However, it’s also possible to use apps such as Divvy to encourage family and friends to contribute to your honeymoon fund.
Here are a few other honeymoon registry sites to consider:
You can stretch your honeymoon farther by putting off the trip so you have time to see how much money you end up with — and so you can take advantage of discounts.
“Early bird bookings or seasonal discounts can shave hundreds or even thousands off your bill,” said McDermott.
Combine strategies to borrow less
For the most part, McDermott and Richards both felt that it’s better to avoid using a honeymoon loan. Using savings strategies or asking for funds from friends and family can make your honeymoon more affordable. And if you’re comfortable using a rewards credit card with an introductory rate, you could even buy yourself more time to pay for the expense.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|6.26% – 14.87%1||$5,000 - $100,000||Visit SoFi|
|6.99% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|