4 Better Alternatives to a Honeymoon Loan

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 situation and income, as well as your term length.

However, McDermott and Richards both suggested that 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 that 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.

“Earlybird 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!
LenderRates (APR)Loan Amount
¹ Includes AutoPay discount. Important Disclosures for SoFi.

Personal Loans: Fixed rates from 6.199% APR to 15.365% APR (with AutoPay). Variable rates from 6.145% APR to 14.685% APR (with AutoPay). SoFi rate ranges are current as of June 15, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.145% APR assumes current 1-month LIBOR rate of 1.97% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
Terms and Conditions Apply:SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

² Important Disclosures for Citizens Bank.

Personal Loan Rate Disclosure: Fixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

^* Important Disclosures for Upgrade Bank.

Personal Loan Rate Disclosure: Fixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

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