The big fat Indian wedding requires a large budget. If you’re planning a wedding, you’re probably running between caterers, musicians, and decorators. Food tasting and picking out colors for the flowers might be fun, but there is nothing fun about going over budget. The bills can rack up in lakhs. With a wedding loan, you can have your dream wedding and have a secure future after it.
What is a wedding loan?
A wedding loan is basically a personal loan. Loans of these kinds are unsecured, meaning they require no collateral or security deposit.
In the age of social media, a wedding is not a one-day event. Pre-wedding photoshoots, bachelor parties, destination weddings, glitzy receptions in five-star hotels, wedding planners, custom jewelry, five-course meals, drone cameras, and so much more. These must-haves can cost a fortune. A wedding loan saves you from cash crunch situations and allows you to plan the wedding of your dreams.
You might need a personal loan otherwise, too, as these loans can be utilized for many different projects. A personal loan for your wedding might be ideal if you already have a solid financial plan in place to pay for the wedding, and you simply need to bridge the gap in time.
What does it mean to take a personal loan?
If you haven’t figured out how to pay off the debt but really want to get a custom suit made or a designer lehenga, you should think hard about taking out a personal loan. The last thing you want is to start your married life with a mountain of debt you won’t be able to pay off. So, even if you decide to take out a personal loan for your wedding, make sure to stay within your budget.
5 things to be aware of before you take out a wedding loan
On marriage loans, individuals should choose the optimum repayment time and equated monthly payments (EMIs). The quantum and frequency of EMIs should be carefully considered before making a decision. Individuals should choose an amount that they can comfortably repay. Examining the basic terms and conditions of marriage loans from various well-known banks and financial service firms will help you make more informed judgments.
You can utilise a personal loan EMI calculator to experiment with different numbers till you land on the ideal one.
Wedding loans generally have a high-interest rate as they are unsecured. Lenders can charge you 11%, or it can go up to 24% as well. You can always check for lower interest rates online. They also depend on your credit history, your monthly income, and your employment type. You should do thorough research before you commit to a lender.
Always check your eligibility before you apply for a personal loan.
- Age- You should be in the 21 to 65 age group
- Monthly income- The minimum amount varies from lender to lender. The most common minimum monthly income for eligibility is 15000 INR.
- Credit score- A clean credit record with a score above 720 looks very good on the loan application. The credit score is not mandatory but can help you get lower interest rates.
- Amount loaned- You can loan upto thirty times your monthly income.
Here is the opportunity to show how great you work with your partner. Financial institutions may provide a larger loan depending on the earning capacity of both partners. After taking out a joint loan, partners must make regular repayments because missing payments may harm their credit histories, making it difficult to obtain other loans such as a vehicle loan or a home loan.
Prepayment penalties are imposed by the majority of banks and non-bank financial institutions (NBFIs) on marriage loans. If an individual wants to prepay the loan amount before the lock-in term ends for any reason, financial institutions may charge a prepayment penalty of roughly 5% since a diversion from scheduled receivables and payables upset banking operations. In most cases, there is a six-month to one-year lock-in term.
Weddings are like festivals in India. They are celebrated with hundreds of people in attendance. Even if you want a quiet wedding, you should look at personal loans for future projects. You might need a personal loan for other things as well. For example, remodeling your house or upgrading appliances, or even post-wedding vacations. Personal loans are often called multi-purpose loans for this very reason.