Only in 2020 can the cost of saying “I don’t” outweigh the cost of saying “I do.”
One in 9 couples planning to marry this year, or 225,000 engaged pairs, owe $3.7 billion in personal loans for canceled weddings during the pandemic, according to a new analysis from Loanry, an online personal lender. That works out to about $16,444 in outstanding balances on average for each couple.
“This last year will have been devastating for many couples,” said Ethan Taub, founder of Loanry, “especially for the percentage paying off loans for weddings that haven’t happened.”
The analysis considered five factors: the average number of weddings that take place each year, the percentage of those postponed this year, the number of personal loans taken out for weddings, the average cost and budget of a wedding, and the average loan amount for a wedding based on Loanry’s own data.
The pandemic has caused engaged couples to drastically reduce their guests lists, marry in their backyards, and cancel honeymoons. The evolving postponements and plan reversals have come with fees for many couples, some of whom were already under financial stress during their initial wedding planning.
As new invitations go out and new vendor contracts are made for 2021, engaged couples who financed their nuptials and are now in a financially precarious position still owe a large debt to lenders.
The average personal loan for wedding-related expenses is $16,500, according to Loanry — which is nearly half of the total average wedding cost of $33,900 in the United States as of 2019. As more couples self-fund their nuptials, the move to borrow money for their wedding days is growing at a fast clip and “quadrupled” from 2018 to 2019 for one online lender, according to a report in The Washington Post.
The move is so common that lenders have caught onto the phenomenon and created wedding-specific loans, such as those for engagement rings or wedding debt consolidation. Of the 20 million personal loans issued last year in the U.S., 1.5%, or 300,000, were taken out to help finance weddings.
“You should take financing a wedding using a loan very seriously,” Taub said, “and we don’t recommend it.”
Since the wedding industry has been forced to scale down in 2020, the move to smaller, more intimate affairs may stick around as long as the pandemic does. The trend may mean that engaged couples will now plan weddings that are more within their budgets, and are not dependent on financing.
“However, we can take a positive from this situation. It may have highlighted that an exuberant wedding isn’t always the best option,” Taub said. “The occasion will be memorable no matter how much you spend on it.”