Wedding loans exist and couples are borrowing $11,000 on average to pay for the perfect day

How wedding loans work

Love and marriage ... and loans.

The average American wedding costs nearly $39,000. A growing number of newlyweds-to-be are relying less on their families to pay for their dream ceremonies and are instead choosing to go into debt.

These young couples, dreaming of "Instagramable'"wedding venues, cigar bars, candy buffets, photo booths and the like, are now spawning a new breed of personal debt championed by Silicon Valley tech start-ups — millennial-targeted wedding loans. Lenders say they are issuing double the amount of wedding-branded loans in 2019 than a year earlier, promising fast cash directly to your bank account.

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Upstart promotes its use of artificial intelligence and machine learning to measure nearly 1,500 data points to determine an applicant's ability to pay back a loan. Rather than looking at a credit score alone, the company evaluates education, area of study and job history when considering applicants.

The average wedding loan Upstart approves is $11,000 for a three-, five- or seven-year term. The annual percentage rate, which is the rate charged for borrowing and represents the yearly cost of the loan, can fluctuate between 5 percent all the way up to nearly 36 percent, depending on the applicant.

Online lender Earnest, which also issues loans for vacations and home improvement projects, uses the tagline "Inspired by Pinterest? Make it happen with low interest," to market its wedding loans. Additionally, loan provider Prosper offers couples engagement ring financing and extra cash for their honeymoon.

However, wedding loans are more of a PR play rather than an entirely new product, experts say. They're simply unsecured personal loans rebranded to attract new borrowers, especially those in their 20s and 30s.

And some critics are concerned that the efficiency and ease these companies promise in getting cash could become more of a burden than a benefit as Americans become swamped with debt.

In the first quarter of 2019, total household debt breached $13.6 trillion, according to the U.S. household debt and credit report released by the Federal Reserve Bank of New York.

Before you secure a $30,000 loan to fund your special day, check out this video to learn more about the wedding loan industry and discover what steps experts recommend you take before applying.

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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.