Like most other regions in the world, marriages are a gala affair in India too. With all the pomp and glitter, comes a hefty bill that can break your bank. Thankfully, instruments such as a loan for marriage can ease this financial pressure. A marriage loan can help in successfully meeting short-term expenses by allowing you to repay your debt over an extended period at reasonable marriage loan interest rate options.
What is a Marriage Loan?
Offered by many financial institutions, a marriage loan is a form of personal loan for marriage that can be availed to meet wedding expenses. With the help of a marriage loan EMI calculator, you can calculate the amount you would have to pay as EMI to borrow the amount you need. It means you can avoid liquidating your savings or investments to meet the wedding expenses.
Also Read: How To Manage Your Finances After Marriage?
What are the Benefits of a Marriage Loan?
Most financial institutions advertise wedding loans as instant loans due to their short loan processing time and fast disbursal of funds. Once deposited into your bank account, you can use the money for all kinds of wedding-related expenses. This includes bookings for the honeymoon, banquet halls, hotel rooms, makeup artists etc. Most financial institutions allow you to customize the wedding loan. Based on your cash flow, financial needs and monthly income, you can choose from repayment tenure and EMI options. If you have a good credit score, you may even enjoy very reasonable interest rates on the wedding loan, making it easier to repay the loan faster.
How to Utilize a Marriage Loan Effectively?
A personal loan for a wedding may not help you entirely with the marriage-related arrangements, but it will significantly alleviate your burden when the costs are broken down. Wedding finance is ideal for covering any or all of the four expenses listed below.
1. Venue Booking
It can be hard during the wedding season to find the desired venue. Because of the increased demand for booking, the rates have risen significantly. In India, the cost of renting a wedding lawn ranges from Rs 3,00,000 to Rs 10,00,000. If you wish to host the wedding event at the hotel, you will be charged on a per-plate basis, with prices ranging from Rs 1,000 to Rs 3,000. A personal loan of Rs 5,00,000 can help cover this cost entirely or partially.
2. Decoration
Decorator services these days are not limited to placing flowers at the venue gate and on the stage where the bride and groom sit. People now prefer selfie booths, grand bridal entrances, and a variety of other attractions. The more extravagant your requirements, the higher the service costs. This can be easily taken care of with a personal loan. You can have the most exotic decorations within Rs. 5 lakhs.
3. Jewellery
During the wedding season, the demand for jewellery soars. In India, it is a traditional customary for both the groom's and bride's families to purchase gold jewellery. They buy necklaces, rings and bangles of gold or diamond. A decent engagement ring will alone cost you Rs 1,00,000 if you choose a diamond one. A complete jewellery set would cost around Rs 5,00,000, with prices increasing as you increase the weight.
4. Miscellaneous
Miscellaneous expenses are the most commonly overlooked aspect while preparing a wedding budget. It includes gifts, sweet boxes, ritual necessities, commuting fees, and guest accommodations and meals. This expense accounts for approximately 25-30% of your total wedding cost. Wedding personal loans are the best option if you have budgeted for major expenses but are having difficulty with minor ones.
The Eligibility Criteria:
- Depending upon the lender, the minimum age to apply for a marriage loan varies from 21 to 23 years. The maximum age can be anywhere between 58 and 65 years.
- The minimum income threshold also varies from lender to lender and ranges anywhere between Rs 15,000 to Rs 25,000. It may also depend on the city of residence and age.
- Both self-employed and salaried individuals can avail a wedding loan as long as they can prove that they have a steady source of income.
- Applicants who have a credit score above 700 have a better chance of securing a marriage loan. Applicants below 700 can still qualify for a loan provided they are willing to pay higher interest rates.
Also Read: 5 Brilliant Ways to Avail a Personal Loan with a Low Credit Score
Necessary Documents to Apply for a Marriage Loan
While the exact set of documents may vary from lender to lender, the documents mentioned below are commonly asked for while applying for a wedding loan:
- Identity proof: National Rural Employment Guarantee Act (NREGA) Job Card, Ration Card, Driving License, Aadhar Card, PAN Card, Passport or Voter ID
- Address proof: Voter ID, Rental Agreement, Telephone/Electricity/Water Bill, Aadhar Card, Ration Card, Passport or Driving License
- Age proof: PAN Card, Birth Certificate or School Leaving Certificate
- Employment Status: Salaried individuals will have to furnish their recent salary slips or Form 16 to confirm employment. Self-employed individuals will have to provide their primary account bank statements for six months, Balance Sheet, P&L Account and IT returns of two previous years.
- The loan application form
Also Read: Opting for Instant Personal Loan Know How to Get Better Interest Rate
What Considerations to Make Before Availing of a Personal Loan for a Wedding?
Wedding personal loans have no collateral, so if not chosen carefully, the interest rate will be high, making repayment difficult. Here are some points to consider.
- Regularly track your credit report. Work on improving any negative points on the report that are influencing the loan approval chances.
- Compare lenders to see what they have to offer, how much they charge, and what documentation and eligibility requirements they have.
- Never apply to more than two lenders at the same time. The hard inquiries made during the approval process affect your credit score.
- Try to get a loan for your daughter's marriage from your current lender. They are well aware of your credit history and have all of your documentation saved in their database, resulting in a quick disbursement at a lower personal loan interest rate.
- Be mindful of the repayment tenure. The shorter term increases EMI, while the longer tenure lowers EMI but raises total interest payable.
Ready to Apply For That Loan?
Applying for a wedding loan is more than just meeting the eligibility criteria or getting your documents in order. Before you sign on the agreement, make sure that you have planned a way for repayment for the loan.
Use a marriage loan calculator and freeze the overall budget at an early stage to help you plan your wedding more efficiently. In addition to deciding the loan amount, it will also help you to plan your day-to-day expenses. Negotiate with vendors such as musicians, decor, invitation printers, florists and photographers for the best price. Last but not least, regularly track your expenses and make sure you do not get carried away while planning for the best day of your life.
Disclaimer: This post was first published on 8th April 2021 and has been updated for the latest information, freshness and accuracy.
