Why online banks need to be transparent with customers when they apply for a wedding loan

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Your wedding is undoubtedly one of the most special and significant days of your life.

Depending on what you want your big day to look like, weddings can often take a lot of hard work and dedication to plan.

When you take the time to think about it, there’s a lot to consider.

Everything from booking a venue to hiring a photographer – not to mention picking out the wedding dress of your dreams, all costs money. A lot of money in some cases.

Even the cake can sometimes be expensive.

That’s why many couples turn to banks and other types of lenders – applying for a wedding loan to help supplement the cost of tying the knot. And, with the average cost of a wedding on the rise, it’s hardly surprising that some people decide to borrow to help fund their big day.

Why is transparency important for potential Wedding Loan applicants?

When applying for a wedding loan, it’s important that borrowers know exactly what they’re getting from lenders.

If banks are transparent with their customers throughout the wedding loan application process, then couples are in a much healthier position to make a well-informed judgement on whether or not a wedding loan is the most suitable option to help them fund their big day.

Many people end up with a more expensive rate than what was initially advertised to them in the first place.

According to a recent Cebr research report commissioned by Shawbrook Bank, the difference between the APRs advertised by lenders for personal loans and what consumers are actually paying in interest has been growing.

The report states that while the average APR paid for a personal loan is 7.3%, APRs advertised by lenders for the average loan value of £9,000 actually ranges from 2.8% to 4.9%. Therefore, many people end up with a more expensive rate than what was initially advertised to them in the first place. This could be a problem for some people – especially if they have already set out their own monthly budgets ahead of their wedding day based on the interest rate advertised to them by their lender of choice.

According to the same report, in a survey of 1,500 people who have applied for a personal loan in the last two years, 83% expected to be offered the advertised Representative APR when actually making their application.

Borrowers could also benefit by lenders being more transparent with regards to how couples applying for a wedding loan have their credit history checked. For example, if an engaged couple applied for a wedding loan and get rejected – it could leave a negative imprint on both their credit scores, in some cases.

If their credit rating has been affected, it could prevent them from shopping around further or taking out a wedding loan elsewhere.

 

 


According to the Cebr report, 22% of people surveyed were unaware of the possibility that their credit score could be impacted before starting the process of application.

If lenders are more transparent on the applicants’ potential of being accepted for a loan from the outset, borrowers are less likely to jump straight into an application that could leave a mark on their credit score – and affect their chances of getting that all important additional funding to help them with their wedding.

 

Shawbrook's commitment to Wedding Loan transparency

If customers know their guaranteed APR from the beginning of the wedding loan application process and get an instant quote without fear of affecting their credit score – future husbands and wives-to-be can plan their wedding without any added stress or confusion with regards to their finances.

That’s why Shawbrook Bank is fully committed to being transparent from the outset when it comes to personal loans. Our customers are our top priority and this is reflected in our five-point Transparency Charter, in which we promise to be honest, upfront, open, clear and fair.

 

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  1. Honest –With Shawbrook,you’ll find out your guaranteed personalised rate from the beginning – meaning you can start to budget for your wedding without fear of having to pay a different, more expensive rate once you get accepted for a loan.
  2. Upfront – We take our responsibilities seriously. We look at your personal circumstances and we’ll only lend to you if we are comfortable that you can afford the wedding loan, and we’ll let you know if you would be accepted before you apply.
  3. Open – Shawbrook enables you to get an instant quote for a wedding loan without leaving a mark on your credit score. This is because we use a soft credit search which enables us to examine your credit history without leaving a footprint visible to other lenders. This allows you to shop around and make an informed decision without paying the penalty with regards to your credit score.
  4. Clear – We’ll make things as clear and simple as possible during the wedding loan application process.
  5. Fair – We won’t charge some customers more to subsidise those who may have been offered better rates.

If you’re interested in learning more about Shawbrook Bank wedding loans, there are a few things you may wish to bear in mind.

First of all – you can borrow from £1,000 to £35,000 which could help if you need that additional financial push to fund that dream honeymoon, or simply need some extra cash to cater for a few more guests. You can apply to borrow an amount that works for you, rather than against you. Just know that the APR varies depending on our assessment of your financial situation and chosen amount to borrow.

In addition to the fixed interest rate, you’ll know exactly what your monthly repayments are from the start – and the various loan terms are available from 1-7 years.