What is a Marriage Loan?

Marriage Loan, also known as a wedding loan is a Personal Loan given to meet wedding expenses. You would want the wedding, be it your own wedding or the wedding of your child, which is a once-in-a-lifetime affair to be perfect. You can make your dream wedding come true with a Marriage Loan.

Some banks offer a pre-approved Personal Loan to their existing customers which will be credited instantly, within seconds on receiving a request, into the account maintained with them.

Even otherwise, the loan will be granted within a few hours if you apply for the loan online and provide all the required information and documents. The loan process will be hassle-free if you have a stable income and your credit score is good.

Eligibility for a Marriage Loan

The eligibility criteria for a Marriage Loan differ from lender to lender, but the common eligibility criteria are as mentioned below:

  • The applicant should be a confirmed employee of Central/State Government Departments, PSUs, Reputed Companies, Corporates and MNCs with a work experience of at least 2 years in the present employment.
  • Applicants can also be self-employed professional or non- professional with a profitable business existence for at least 2 years in the present business.
  • The minimum income should be between 15,000 to 25,000 depending upon the bank the loan is availed from.
  • For salaried individuals, the monthly salary should be credited to the account maintained with the Bank.
  • Age of the applicant should be between 21 years to 60 years for salaried individuals and between 21 years to 65 years for self-employed individuals.
  • The debt to income ratio (DTIR) stipulated by the banks should be met with. The ratio ranges from 30% to 50% depending upon the bank the loan is availed from.
  • The credit score should be good. Usually lenders prefer a credit score which is above 700.
  • The maximum loan amount ranges from 15 Lakhs to 50 Lakhs depending upon the bank the loan is availed from. The loan quantum is fixed based on the income and the repayment capacity.

Benefits of a Marriage Loan

Marriage in one's life is the most important event and should be planned meticulously. The marriage expenses include booking a venue, buying jewellery, wedding trousseau, decorations, catering, making arrangements for guests, etc., which involve a lot of expenditure. The last moment funds crunch while planning such big events is inevitable. At such times, a Personal Loan can be a saviour.

Benefits of availing a Marriage Loan to meet the expenses are various. Some of them are as mentioned below:

  • Marriage Loan will spare you from liquidating your savings. Liquidating savings like fixed deposits before maturity will result in losing some amount of interest.
  • The unrestricted usage of the loan is the main advantage. It can be used to cover any kind of expense involved in planning a wedding.
  • Documentation and loan processing is simple and hassle-free. If the loan is applied online and all the information and required documents submitted the turnaround time will be drastically minimised and you can get the disbursement within hours.
  • The repayment tenure is flexible which allows you to choose the repayment tenure to arrive at an equated monthly instalment (EMI) that suits your pocket.
  • If you have a stable income and a good credit score it is so much easier to get the loan approval.
  • There is no need to provide any collateral security for availing the loan
  • Some banks have the provision of pre-approved loans for their existing customers. In such a case, the banks will credit the loan proceeds to an account maintained with them within seconds on receiving a request for a loan.
  • If you are a long-standing customer of the bank with a good track record, a good income and, a good credit score, you can leverage the goodwill to negotiate on the interest rates and other charges associated with the loan.
  • Pre-closure and part-payment options are available. You can avail of this facility and either make part-payment or pre-payment whenever there are surplus funds, and reduce the cost of the loan.

Who Can Avail a Marriage Loan?

An applicant who satisfies the following criteria can avail a Marriage Loan:

  • The applicant should be a confirmed employee of Central/State Government Departments, PSUs, Reputed Companies, Corporates and MNCs with a work experience of at least 2 years in the present employment.
  • Applicants can also be self-employed professional or non-professional with a profitable business existence for at least 2 years in the present business.
  • The minimum income should be between 15000 to 25000 depending upon the bank the loan is availed from.
  • For salaried individuals, the monthly salary should be credited to the account maintained with the Bank.
  • Age of the applicant should be between 21 to 60 years for salaried individuals and between 21 years to 65 years for self-employed individuals.
  • The debt to income ratio stipulated by the banks should be met with. The ratio ranges from 30% to 50% depending upon the bank the loan is availed from.
  • The credit score should be good. Lenders prefer a credit score which is above 700.
  • The maximum loan amount ranges from 15 Lakhs to 50 Lakhs depending upon the bank the loan is availed from. The loan quantum is fixed based on the income and the repayment capacity.

How Do Banks Calculate Marriage Loan Eligibility?

The eligibility of a Marriage Loan primarily depends on the monthly income, rate of interest and loan tenure. The DTIR (i.e., the total EMI on consolidating all the present commitments including the present EMI) stipulated is 30% to 50% of the net take-home salary depending upon the bank the loan is availed from.

Rate of interest depends on the following factors:

  • Net take- home salary after deducting all the existing commitments including the EMI of the proposed loan.
  • Credit history and credit score. The accepted credit score is 700 and above.
  • Your work profile. If you are a salaried individual, the interest is rate is much lower than what is fixed for self-employed individuals. The reason being salaried individuals have a fixed income whereas the income of self-employed individuals is not regulated.
  • Your employer plays an equally important role. Banks have special schemes for employees of Corporates.

Documents Required for a Marriage Loan

The following documents are required for a Marriage Loan:

For Salaried employees

  • Duly filled application form for a Marriage Loan
  • Passport size photographs of the applicant
  • ITR records from the last 2 years
  • Proof of Identity such as the applicant's Passport/ Voter ID/ PAN Card/ Driving License
  • Proof of Residential Address such as Registered Rent Agreement/ Passport/ Leave and License/ Utility Bill of at least 4 months.
  • Proof of Income such as last 6 months' salary slip, Form 16 of 2 years, Bank statement for at least the last 6 months that reflects salary being credited or EMI being debited.

For Self-Employed

  • Duly filled application form for a Marriage Loan
  • Passport size photographs of the applicant
  • ITR records from the last 2 years
  • Proof of Identity such as the applicant's Passport/ Voter ID/ PAN Card/ Driving License
  • Proof of Residential Address such as Registered Rent Agreement/ Passport/ Leave and License/ Utility Bill of at least 4 months.
  • Proof of Business like GST Returns/ company's incorporation details
  • Address proof of the business, accounts and balance sheets showing profit and loss statements which have been certified by a CA, the proof of the business's existence a copy of the partnership deed and business profile.
  • In case of Companies KYC documents of Directors and in case of partnership firms KYC documents of partners.

What Are the Key Factors to be Kept in Mind While Availing a Marriage Loan?

The key factors that have to be kept in mind while availing a Marriage Loan are:

  • Consolidate all your savings and monthly income and assess the amount of EMI that will be comfortable for you.
  • Draw the marriage budget meticulously and estimate the loan requirement.
  • Assess the affordable EMI and choose the repayment tenure accordingly.
  • Spend some time and do market research to compare the rates and features of various banks and choose the best deal. Getting a better interest rate and associated charges will reduce the cost of the loan.
  • Also, look for pre-payment options and the charges associated with it. This will be an advantage if you intend to pre-pay or part-pay the loan on availability of surplus funds.
  • Though Marriage Loan is a lucrative option to fund marriage expenses, use your prudence while availing the loan since it comes with a high rate of interest.

Frequently Asked Questions - Marriage Loan

What is a Marriage Loan?

Marriage Loan is nothing but an unsecured Personal Loan offered to cover marriage expenses.

Who can avail a Marriage Loan?

Salaried individuals and self-employed individuals having a stable income and a good credit score can avail a Marriage Loan. The age of the applicant should be between 21 years to 60 years for a salaried individual and between 21 years to 65 years for self-employed individuals.

How do banks calculate Marriage Loan eligibility?

The eligibility is calculated based on the income, rate of interest and the loan tenure. The interest rate again depends on factors like income, credit score and the employer. Banks have special schemes for employees of reputed Corporates.

What is the quantum of loan available for a Marriage Loan?

The maximum loan quantum ranges from 15 Lakhs to 50 Lakhs depending on the bank the loan is availed from. The quantum also depends on the income and the debt to income ratio, i.e., the percentage of net take-home salary after deducting all the present commitments including the EMI for the proposed loan.

Does my credit score affect my ability to get a Marriage Loan?

Yes. Your credit history and credit score both affect your eligibility for a Marriage Loan. Most banks prefer a credit score of 750 and above.

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