Marriage Loan: Top 5 Things to Keep in Mind While Availing this Line of Credit!
Marriage is one of the most important events in an individual’s life. Whether it’s your own marriage or for your loved ones, you do not want to leave any stone unturned to make the event a memorable affair. Even it is beyond your means to splurge on the event; you do not hesitate from doing so. In many cases, you must have created a reserve fund or an investment to pay for the expenses. But in your excitement to make the wedding a once-in-a-lifetime occasion, you end up far exceeding your budget. In such a situation, you are left with no other alternative but to raise funds through borrowings.
While you have the option of borrowing from your friends or family, the social stigma it carries might act as a deterrent. In such a case, you can consider availing a Marriage Loan.
About Wedding/ Marriage Loan
As the name suggests, a Wedding Loan is a type of Personal Loan which is available for financing expenses related to a marriage function. Lenders understand that on the occasion of marriage, money should not be a hindrance, and that is why many financial institutions have started offering Marriage Loans.
Due to marriage loans being a relatively new credit product, not many financial institutions offer it presently. If your financial institution does not offer a Marriage Loan, then you can always apply for a Personal Loan and take care of the expenses. SBI Personal Loan, HDFC Personal Loan, Bajaj Finserv Personal loan and ICICI Personal Loan are some of the most popular Personal Loans availed by customers for meeting wedding-related expenses.
Though the specific eligibility criteria followed by lenders might vary on a case to case basis, the below-mentioned points are common across all lenders:
The minimum age required for an individual to apply for a Marriage Loan is 21 years. Though some lenders require the minimum age to be 25 years. As far as the maximum age is concerned, in the case of salaried individuals, it is capped at 58 years while in case of self-employed individuals, it is 65 years.
2. Minimum Income
In order to be eligible to apply for a Marriage Loan, lenders ask for a minimum net monthly income of Rs. 15,000. Though, this figure might vary depending on your credit profile and amount to be borrowed and might be increased to Rs. 25,000. As far as employment type is concerned, Marriage Loans are available for salaried, self-employed, and licensed professionals.
3. Employment stability
Lenders require applicants to have a steady source of income to be eligible for a wedding loan. In case of salaried applicants, it is expected that they should be working for at least the last two years, with at least 1 year of work experience with the current employer. Self-employed individuals and professionals should be earning a stable income for the last three years.
4. CIBIL Score
As a marriage loan is an unsecured loan, lenders require the applicant to have a CIBIL score of 750+. The minimum CIBIL score that they are willing to accept is 700+ and that too, with a strict screening process.
5. Maximum loan amount
The maximum amount available as a Marriage Loan usually varies across lenders. Though, in most cases, the maximum amount for a Wedding Loan is capped at Rs. 25 Lakhs.
Things to keep in mind while availing a Marriage Loan
The idea of having a dream wedding exactly as you wish seems too good of an opportunity to miss, but there are certain points that you must keep in mind before availing a loan for the purpose:
Amount to be availed
With many lenders offering up to Rs. 25 Lakhs as Wedding Loans, you might be tempted to go for the maximum amount available. It is important that you do not get carried away by emotions and think carefully before filling out the amount option in the application form. It is ultimately a borrowing which carried an interest cost and must be repaid as soon as possible. So, apply for such an amount which comes with an EMI that you can easily afford without compromising on your other lifestyle expenses.
Rate of interest is one of the biggest factors that you should consider before availing a Wedding Loan. As the interest rate for Wedding Loans vary from 12% to 23% across lenders, a hasty decision might prove to be too costly for you. Therefore, you must make it a point to conduct in-depth research on various types of Marriage Loans available in the market. Do a comparative analysis and then only select the best option.
You might not know this, but many lenders levy hefty foreclosure charges against Wedding Loans. These foreclosure charges might go as high as 5%, which can deal a severe blow to your finances. So, you must make it a point to discuss the same with your lender. If your lender does not agree to your requests, you can opt for a Personal Loan with no foreclosure charges such as SBI Personal Loan.
Do not apply for a joint Marriage Loan
Sometimes, you might feel like adding a co-applicant to your Marriage Loan application to enhance the eligibility amount. This will also improve the chances of the loan being approved. But this could lead to creating a false sense of security in you, and you might end up availing a higher amount. This can be dangerous for your future finances, and you must, therefore, avoid taking a joint Marriage Loan.
Review the expenses
Well, it goes without saying that money saved is money earned. You must, therefore, prepare a list of all the upcoming expenses for the wedding. From this list, remove the expenses which are either unnecessary or are extravagant. This will help you bring down the cost of the event and make it more affordable for you.
Wedding Loan is certainly a handy credit facility, however it should be avoided unless absolutely necessary. You must start planning for the related expenses much before the impending wedding to avoid any unfavourable circumstances later on. If absolutely necessary, consider applying for a Personal Loan such as ICICI Personal Loan which comes with much customer-friendly terms and conditions.
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