If you want to buy a house, you can apply for a home loan. Likewise, there is an auto loan if you need to borrow money to buy a car. However, if you are starting to look for a loan to support the expenses of a wedding, you can find loans called “wedding loans” on the websites of banks, NBFCs and private lenders. A wedding loan or marriage loan is basically a personal loan that you can choose to meet all your wedding-related expenses. After determining your eligibility for a personal loan and using a personal loan interest rate calculator to determine the right term, you can easily qualify for a wedding loan.
Advantages and disadvantages of a wedding loan
Although you have at heart to organize 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 you
● Finance several expenses: As we all know, the grand Indian wedding is incomplete without ‘group, baja, baraat’ and all the other flourishes that accompany this monumental event. You can use a wedding loan to pay for venue, lighting, photography, decor, catering, jewelry, gifts, and more.
● Hassle-free application: A wedding in India can be a truly harrowing experience for the person who arranges and organizes it. Fortunately, getting the right wedding loan is anything but. You can easily apply for a wedding loan online – visit the website of your preferred bank or lending institution, check the eligibility criteria, upload your documents and wait for approval.
● Quick disbursement: The small loan has a quick turnaround time. This means that you can access the funds quite quickly. Within 24 to 48 hours of your loan application, you will receive the loan amount paid into your account.
● Increase the CIBIL score: A wedding loan is a great way to build a strong payment history with your partner. Paying off your wedding loan quickly will boost your credit score and put you in a good position to take advantage of future loans.
Like any other loan product, a wedding loan also has its share of disadvantages.
Here are 3 disadvantages of using a personal loan for your wedding:
● Higher interest rate: A wedding loan is an unsecured loan, which means you don’t have to keep any collateral with the bank. This is why wedding loans come with higher interest rates. If you don’t read the fine print carefully, you can also be slapped with high late fees or other hidden charges. We suggest running the numbers using a personal loan interest calculator and checking your monthly repayment obligation before applying for a loan.
● Debt from day one: When you get married and start building a new life with a certain person, the obligation to repay 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 must weigh all the factors before opting for a wedding loan.
● Monthly Budget: Newlyweds have one-time expenses such as impromptu vacations, dinners, brunches, and unexpected guest receptions. Having to repay a significant portion of your salary as a loan, EMI may not allow you to spend as freely as you would like. Depending on the loan amount you have applied for, you may face relatively financial hardship for years before the full loan amount is repaid.
3 factors that affect your eligibility for a wedding loan
If you wish to benefit from a wedding loan, you must meet the eligibility criteria for the personal loan defined by the lender. Here are the three main factors that affect your eligibility for a wedding loan:
● Your CIBIL score: Your credit card bill, loan repayment history, and credit usage determine your credit score. Most Indian lenders will check your CIBIL score to see if you are a good candidate for a loan. If you have a CIBIL score of 750 and above, your loan application will likely be approved instantly.
● Your debt ratio: Creditors check your monthly income (whether you are employed or self-employed) to determine if you can repay the loan you are requesting. Banks will also look at your existing debts like student loan, home loan, car loan, credit card debt, etc. to establish your debt to income ratio.
● Your job profile: Job security, work experience, applicant age, and even employer profile may be reviewed by the lender to assess your loan eligibility. All of these factors effectively indicate whether the applicant will be able to repay the loan on time without defaulting.
If you lack the funds to meet the expenses of your wedding, availing yourself of a personal loan or a wedding loan is a logical choice. You should only apply for a wedding loan after comparing the interest rates and other fees charged by different lenders. Some important factors that will help you choose a lender include the maximum loan amount offered, applicable interest rate, loan term, automatic debit discount, prepayment charge, and ease of foreclosure. If you are planning your wedding soon, check out the best wedding loan deals from Bajaj Finserv. By meeting the simple eligibility criteria set by the lender, you can get a great loan amount.