If you want to buy a home, you can apply for a home loan. Similarly, there is a car loan if you need to borrow money to buy a car. However, if you start looking for a loan to bear the expenses of a wedding, you may find loans termed ‘marriage loans’ on the websites of banks, NBFCs and private lenders. A marriage loan or a wedding loan is essentially a personal loan that you can choose to meet all your wedding-related expenses. After you have determined your personal loan eligibility and used a personal loan interest rate calculator to establish the right tenor, you can easily avail yourself of a wedding loan.
Pros and Cons of a Wedding Loan
While you may have your heart set on having the wedding of your dreams, it is important to ask yourself one thing — ‘Do I want to start my married life with a debt?’. But a wedding loan is not necessarily a bad thing.
Here are 4 reasons why availing yourself of a wedding loan can help
- Fund multiple expenses: As we all know, the Great Indian Wedding is incomplete without ‘band, baja, baraat’ and all the other frills that come with this monumental event. You can use a wedding loan to pay for the venue, lighting, photography, decoration, catering, jewellery, gifting etc.
- Hassle-free application: A marriage in India can be a genuinely harassing experience for the person arranging and organizing it. Thankfully, getting the right wedding loan is anything but, You can easily apply for a wedding loan online – simply visit the website of your favourite bank or lending institution, check the eligibility criteria, upload your documents, and wait for approval.
- Quick disbursal: Small loan has a fast turnaround time. This means that you can get access to funds quite fast. Within 24-48 hours after you apply for the loan, you get the loan amount disbursed in your account.
- Boost CIBIL Score: A wedding loan is a terrific way to build a solid payment history with your significant other. Paying off your wedding loan promptly will boost your credit score and put you in a good place to avail yourself of future loans, when needed.
Like any other loan product, a wedding loan also comes with its share of cons.
Here are 3 cons of availing yourself of a personal loan for your wedding:
- Higher interest rate: A wedding loan is an unsecured loan, which means you do not have to keep collateral with the bank. This is why marriage loans come at higher interest rates. If you do not read the fine print carefully, you may also be slapped with high late fees or other hidden charges. We suggest you run the numbers through a personal loan interest calculator and check your monthly repayment obligation before applying for a loan.
- In debt from Day 1: When you get married and start building a new life with a certain someone, the repayment obligation of a wedding loan is likely to put a strain on the relationship. If you have other liabilities like a student loan, things can be even more stressful. Thus, you should weight out all the factors before going for a wedding loan.
- Monthly budget: Newly-weds have a host of unique expenses such as impromptu vacations, dinner dates, brunches, and entertaining unanticipated guests. Having to repay a significant portion of your salary as your loan, EMI may not allow you to spend as freely as you may want to. Depending on the quantum of loan you applied for, you may have to face relatively financial hardship for years before the entire loan amount is paid off.
3 factors that affect your eligibility for a Wedding Loan
If you want to qualify for a wedding loan aka personal loan, it is important that you match the personal loan eligibility criteria set by the lender. Here are the three main factors that affect your eligibility for a wedding loan:
- Your CIBIL Score: Your credit card bill and loan repayment history and credit utilization determine your credit score. Most Indian lenders will check your CIBIL score to check if you are a good candidate for a loan. If you have a CIBIL score of 750 and above, your loan application is likely to be approved instantly.
- Your Debt-to-Income ratio: Creditors check your monthly income (whether you are salaried or self-employed) to figure out if you can repay the loan you are applying for. Banks will also examine your existing liabilities like a study loan, home loan, car loan, credit card debt and so on to establish your debt-to-income ratio.
- Your employment profile: Job security, work experience, applicant’s age and even the employer’s profile may be scrutinized by the lender to assess your loan eligibility. All these factors effectively indicate if the applicant will be able to repay the loan on time without defaulting
If you are short on funds to meet your wedding expenses, availing yourself of a personal loan or a marriage loan is the logical choice. You should apply for a wedding loan only after comparing the interest rates and other charges levied by different lenders. Some important factors that will help you choose a lender include the maximum loan amount offered, applicable interest rate, loan tenure, auto-debit discount, prepayment charges and foreclosure facility. If you are planning your wedding soon, be sure to check out the best marriage loan offers from Bajaj Finserv. On meeting the simple eligibility criteria set by the lender, you can get a high-value loan amount.
Disclaimer: This content is distributed by Bajaj Finance Ltd. No TNIE Group journalist is involved in the creation of this content.