Wedding Loans: How Do They Work And Should You Get One?

Few milestone events in life require such a large cash outflow at one time as a wedding. From the banquet to the honeymoon, many couples don’t mind splashing out to achieve the wedding of their dreams.

The reality, though, is that this can stretch their finances, and at a time when other major costs such as flat downpayment and renovations may come into play. 

This is when wedding loans can prove helpful. Also known as personal loans, these can help tide you over when circumstances necessitate a large spend.

Here’s a guide to wedding loans and how they could help you turn your vision of your big day into reality.

How wedding loans work

What sets wedding loans apart is that they unlock a ready line of credit without the need for collateral backing.

To successfully apply for such a loan, banks and financial institutions require candidates to be employed, be of a certain age and earn a minimum income.

Typically these are short term loans, and you would pay them back in instalments over the set time period. 

Documents required for application usually include a copy of your NRIC, your IRAS Notice of Assessment, CPF statement, your last few months’ pay slips, and documents reflecting your billing address.

Applications can be done online for most banks; some also allow you to apply through their mobile apps. For financial institutions, you can apply online or visit one of their outlets.

Wedding costs that loans can cover

Wedding loans can range from small amounts to up to 10 times your monthly salary, so they should be more than sufficient to cover your wedding costs. These are some of the estimated expenses you could tap on a loan to cover:  

• Wedding banquet (15 tables of 10): S$5,800–S$47,300
• Wedding photography: S$2,000–S$4,000
• Wedding videography: S$2,000–S$4,000
•  Pre-wedding photoshoot: S$350–S$800
• Wedding hair and make-up: S$250–S$1,000
• Wedding car rental: S$300–S$900
• Wedding gown and suit: S$500–S$5,000
• Wedding rings: S$500–S$2,000

The loan could hence help to cover an amount between $10,000 to S$70,000, depending on what you want to include for your wedding. Some of these expenses could possibly be offset by the red packets you’d receive at your wedding.

However as this amount is not guaranteed, you’d still want to ensure enough cashflow to cover all your bills.

Best wedding loan options

So you’ve decided that taking a loan would help you to breathe a little easier when it comes to your wedding expenses. Let’s take a look at some of the top options in the market.

HSBC Personal Loan

If you have an annual income of S$30,000 as a Singapore Citizen or Permanent Resident (PR), or S$40,000 as a foreigner residing in Singapore or self-employed Singaporean, and are aged 21 and above, the HSBC Personal Loan can provide you with one of the lowest annual interest rates from 2.92% p.a. (EIR 5.5% p.a.) on the market.

It grants a credit limit of up to S$200,000, where you’ll only need to pay interest on what you eventually spend.

The loan also offers one of the longer tenures of up to seven years, so you’ll be able to spread out your repayments over a lengthier period of time. 

DBS Cashline or Personal Loan

DBS Cashline gets you a quick cash infusion of up to 10 times your monthly salary, if you have an annual income of S$120,000 and above. This line of credit is for Singapore Citizens and PRs, and requires a minimum annual income of S$20,000.

Easy access to your loan is one of the main draws of this option. You can apply for Cashline through DBS’ digibank app, and use it for online transactions, when needing to withdraw cash, and to pay bills. Repayment can be done flexibly, in days, weeks or months. Its interest rate can range between 20.5% to 29.8% per annum.

For a lower interest rate, DBS Personal Loan offers annual rates from 2.68% (EIR 5.43% p.a.), with a 1% processing fee. The loan tenures range from one to five years. You can get cash of up to four times your monthly salary, or 10 times if your annual income is S$120,000 and above. Plus, those earning S$20,000 to S$30,000 annually may still be eligible for DBS/POSB loan but at a higher annual interest rate and processing fee.

UOB Personal Loan

UOB Personal Loan offers an interest rate from as low as 2.88% p.a. (EIR from 5.43% p.a.) and a loan tenure of one to five years. There's also no processing fee. 

UOB CashPlus or UOB credit card members can borrow up to 95% of their credit limit.

What's more, you can get up to 2% unlimited cashback when you apply for a loan of at least S$15,000 with either a tenure of three, four, or five years.  

The minimum annual income requirement for Singaporeans and Singapore Permanent Residents is S$30,000, and you can get up to four times your monthly salary, or six times your monthly salary (capped at S$120,000) if your annual income is S$120,000 and above. Its annual interest rate is 20.9%.

In terms of personal loans, UOB has an annual interest rate of 3.99% (EIR 7.49% p.a.). You’ll need to be a Singapore Citizen or PR with a minimum annual income of S$30,000, and its loan tenures also one to five years.

Citi Quick Cash Loan

Already have a Citibank credit card? Through Citi Quick Cash, you can convert your credit card’s credit limit into cash which is payable in monthly instalments.

Repayment plans range from one to five years, and the minimum income requirement is S$30,000 for Singapore Citizens and PRs, and S$42,000 for foreigners.

For greater convenience, existing Citibank customers can apply for Citi Quick Cash through its mobile app or website.

Standard Chartered CashOne Personal Loan

Standard Chartered CashOne Personal Loan has one of the lower minimum annual income requirements, at S$20,000 for Singapore Citizens and PRs (but S$60,000 for foreigners living in Singapore).

Its loan tenure is also up to five years, and it has an annual interest rate starting from 2.88% (EIR 5.84% p.a.). You’ll be able to borrow up to four times your monthly salary, capped at S$250,000.

CIMB Personal Loan or CIMB Cashlite

From 2.80% p.a. (EIR from 5.28% p.a.), CIMB Personal Loan offers one of the lowest personal loan interest rates in Singapore. You can also enjoy a cashback of up to S$2,000 provided that you take a loan size of at least S$8,000 with a tenure of three, four, or five years. 

Singaporeans or Singapore PRs aged from 21 to 70 years old with an annual income of at least S$20,000 can apply for a loan, and you can borrow up to S$200,000.  

Meanwhile, CIMB Platinum Mastercard, Visa Signature, World Mastercard and Visa Infinite cardholders can convert their credit cards’ credit limits to an instalment loan with a 1 to 5-year tenure.

With CIMB Cashlite, there is an interest rate starting from 2.80% p.a. (EIR 5.28% p.a.) per annum for new customers. This offer is for Singapore Citizens and PRs, with a minimum income of S$30,000.

OCBC Cash-On-Instalments or EasiCredit

OCBC also offers an option to turn your credit card’s credit limit into a loan, which can be repaid over one to five years.

The interest rate is 3.80% p.a. (EIR 7.49% p.a.), and Singapore Citizens and PRs with an annual income of at least S$20,000, or foreigners with an annual income of at least S$45,000, can apply.

The same criteria also applies for OCBC’s EasiCredit loan, which is OCBC’s option for accessing your credit conveniently via mobile and internet banking, through cash withdrawals at the ATM, or cheques.

Loan amounts start from two times your monthly income, and go up to six times your monthly income, depending on your income range, and the annual interest rate varies from 20.9% to 29.8% depending on the amount borrowed.

Maybank CreditAble Term Loan

Maybank has waived its 1% processing fee for online applications for its Term Loan.

All existing or new holders of a Maybank CreditAble account – Maybank’s personal line of credit programme – will be able to apply for a loan, so long as they are Singapore Citizens or PRs with an annual income of S$30,000.

You’ll be able to borrow up to twice your monthly salary, or the credit limit on your CreditAble account and repay your loan over a one to five-year period at a per annum interest rate of 3.88%.

Bank of China SmartLoan

Besides HSBC, Bank of China is another lender that offers a loan tenure of up to seven years if you’re looking to repay your loan over a longer period of time.

Although it has one of the higher annual interest rates, starting at 6.52%, the Bank of China SmartLoan also has a reducing balance repayment system.

This means that you’ll be able to save on interest because it’s calculated based on the outstanding loan. 

Licensed moneylenders

Apart from the bank credit and loan offerings mentioned above, some may prefer to go to licensed moneylenders if they don’t meet the banks’ criteria. While this may be a viable option, you should do so with caution.

When in doubt, always check the Ministry of Law’s list of licensed moneylenders to confirm that the lender is aboveboard. They would also tend to grant smaller loans at higher interest rates than banks, so be sure that you can afford the repayments before agreeing to take out a loan with them.

Conclusion

Getting everything perfect for your wedding doesn’t have to be a financial headache if you take out a wedding loan. These wedding loans can give you a much-needed financial boost, and allow you breathing room in clearing your payments. 

Apply for your loan of choice through SingSaver’s comprehensive comparison tool to ensure you’re getting the best deal, and to benefit from exclusive offers.

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