Wedding Loans Market Expected to Reach $23.26 Billion by 2033

According to a new report published by Allied Market Research, titled, “Wedding Loans Market, By Type (Local Wedding and Destination Wedding), By Interest Rate (Fixed Interest Rate and Floating Interest Rate) and By Provider (Banks, NBFCs, and Others): Global Opportunity Analysis and Industry Forecast, 2024-2033". The wedding loans market was valued at $11.63 billion in 2023, and is estimated to reach $23.26 billion by 2033, growing at a CAGR of 7.3% from 2024 to 2033.

Wedding loans are often structured as fixed-rate term loans, that is, borrowers know in advance the exact amount they owe and the duration for repayment. The interest rates for wedding loans are generally similar to personal loan rates offered by lenders, with some lenders offering personal loans with interest rates of 10% or higher. Borrowers can also opt for secured wedding loans by putting up collateral, such as a car or a house, which can result in lower interest rates and larger loan amounts.

The wedding loans market trends include the rising popularity of destination weddings, rise in wedding costs, and the growing acceptance of non-traditional weddings. Destination weddings have become increasingly popular in recent years, with couples looking to create unique and memorable experiences for themselves and their guests. Furthermore, the cost of weddings has been on the rise, with the average wedding in the U.S. currently costing over $30,000. This has led to an increase in demand for personal loan for wedding, as couples look for ways to finance their special day without incurring significant debt. The cost of a wedding loan varies by lender, and can also depend on the borrower’s credit score, credit history, income, other debts, and other factors. Unsecured personal loan rates can range from 3.49% to 36.99%, and the rate will ultimately impact how much the loan costs. In addition, key players in the wedding loans industry adopt partnership, acquisition, and product launch as their key development strategies to sustain their growth in the market. For instance, in November 2023, Shaadify, a trailblazer in revolutionizing wedding planning experiences, announced the launch of its Marry Now, Pay Later wedding loan services. This innovative offering aims to transform the way couples approach their dream weddings. With a steadfast dedication to turning dreams into realities, Shaadify empowers couples from diverse backgrounds to celebrate their connection without immediate financial burdens. Therefore, such strategies adopted by key players propel the wedding loans market growth.

By type, the local wedding segment acquired a major share of the market in 2023. This is attributed to the high costs associated with traditional weddings, as the expenses often exceed the planned budget. However, the destination wedding segment is expected to be the fastest-growing segment in the wedding loans market during the forecast period. This is attributed to the rising affluence of the middle class, the growing popularity of destination weddings both within India and abroad, and the increased availability of more affordable travel options have all contributed to the surge in demand for destination wedding loans.

By interest rate, the fixed interest rate segment acquired a major wedding loans market size in 2023 as it provides borrowers with a clear understanding of their monthly payments and the total cost of the loan. Predictability and transparency are important factors for couples planning a wedding, as they can budget their expenses more accurately and avoid any unexpected costs. Furthermore, the fixed interest rate of wedding loans offers borrowers security and stability, as they know exactly how much they need to pay each month and for how long. This can help couples avoid the stress and uncertainty of fluctuating interest rates and payments. However, the floating interest rate segment is expected to be the fastest-growing segment in the wedding loans market forecast period as floating interest rates are more cost-effective in the long run, especially if interest rates decrease, allowing borrowers to capitalize on lower rates. The interest rate of a floating loan adjusts according to market conditions, which can result in lower monthly payments during periods of declining interest rates.

By provider, the banks segment acquired a major wedding loans market share in 2023 as the pandemic brought a surge in credit demand from retail customers, with people borrowing money for medical expenses, daily expenses, and weddings. A recent study conducted by IndiaLends, in December 2023, a digital lending platform, revealed that wedding loans constituted 33% of the total loans borrowed during the second wave of the pandemic, making it the highest among all other purposes. However, the NBFCs segment is expected to be the fastest-growing segment in the wedding loans market forecast period. This is attributed to their ability to provide a streamlined loan process with quick approval and disbursement, making them convenient for financial support in a medical emergency, home renovation project, or debt consolidation. Loans from NBFCs are disbursed within 24-48 hours, which is a significant advantage for borrowers who need quick access to funds.

Region-wise, North America dominated the wedding loans market in 2023. This is attributed to the increasing popularity of wedding loans as a financing option for couples planning their weddings. However, Asia-Pacific is considered to be the fastest-growing region during the forecast period as convenience, speed, and tailored solutions offered by lenders have contributed to the growth of the wedding loans market in the region. The flexibility in loan amounts and repayment terms has made it easier for couples to access funds to finance their dream weddings. Stretch loans have become a popular substitute for traditional wedding financing, offering an alternative perspective on this traditional problem that appeals to various financial goals and mindsets. According to data analyzed by LenDenClub, in India, the demand for wedding loans drastically increased by 40% in 2021 from 2020.

According to The Knot’s Real Weddings Study in May 2022, the average cost of a wedding ceremony and reception was around $19,000 in 2020, down from $28,000 in 2019, but returned to pre-pandemic levels in 2021. However, according to the Indian FinTech company CASHe, as a result of COVID-19's greatest impact on weddings, demand for wedding/marriage loan and travel loans from millennials increased by as much as 30% before, during, and after the pandemic. Moreover, the demand for loans with the purpose of marriage was reduced during the early months of the pandemic but within a few months, demand rose, significantly breaching pre-pandemic levels.

Key Findings of the Study

• By type, the local wedding segment held the largest share in the wedding loans market in 2023.
• By interest rate, the fixed interest rate segment held the largest market share in 2023.
• By provider, the NBFCs segment is anticipated to grow at the fastest CAGR during the forecast period.
• Region-wise, North America held the largest market share in 2023. However, Asia-Pacific is expected to witness the highest CAGR during the forecast period. 

The key players operating in the wedding loans market analysis include Social Finance, LLC, LendingPoint LLC, Prosper Funding LLC, Discover Bank, HDFC Bank Ltd., LightStream, Best Egg, Achieve.com, Tata Capital Limited, and Bajaj Finserv. These players have adopted various strategies to increase their market penetration and strengthen their position in the wedding loans industry.