Is availing a Marriage Loan a good idea ? - Here is the Answer.

Why Use Marriage Loan to Fund a Wedding?

 A marriage in family is synonymous with joy and festivity. But, in India, it is also synonymous with huge expenses. This is the reason why you can’t quite have your fair share of joy if you don’t have the funds to cover for the expenses. The expenses may ‘out-budget’ you any time and a fund crunch may come creeping in to dampen your cheerful mood.

What’s the way out in such a situation? A marriage loan, of course! It can be a wonderful option for managing both your planned and unplanned expenses during a wedding.

Marriage Loans

Wedding loan is a purpose of personal loans with an interest rate that’s based on factors such as your credit score, whether they are secured or unsecured, and the amount of money you are looking for borrows. Many lenders are available in the market with unique offers. 

Amount – You can easily avail loan from Rs 50,000 to Rs 30,000,00

CIBIL Score – Above 700 makes a winning marriage loan application.

Eligibility – A person earning as low as Rs 15,000 can apply for and get a marriage loan. The age of the applicant should be between 21 to 60 years. Another important criterion is employment stability of 2 years.

Documents – Basic KYC documents including identity and residential proof along with 2 passport size photographs. 

Pros of Marriage Loan

• Flexibility in use. Yes, as per your convenience, you can outlay the money for  various marriage purposes like food, decoration and orchestra booking.
• You get approval quickly for these types of loans.
• You can easily choose tenure to repay the loan amount, from 1 to 5 years.
• No security is needed to avail the loan, you can easily avail the loan without giving any security. It is good for those who are not able to fulfill this formality. 
• If you have a good credit score, you can enjoy the lower rate of interest it shows better previous financial records. Banks don't want to lose customers with good credit scores, that's why they give a good rate of interest to those who are having good repayment capacity. 
• A marriage loan can help you build credit portfolio. 
• It is also advantageous for you to know if you have the ability to pay the loan within the shorter period of time because then you would be able to pay the less, interest will be lower for a shorter tenure. 
• It leads to fast remittances to your bank account.

Cons of Marriage Loan 

• As they are unsecured loans, hence lender charges you with higher interest. 
• As compared to the other loans the loan amount that you get is not so high because of the fact that these loans are unsecured. 
• You need to pay more rate of interest if you select a longer tenure to repay the loan.  If you avail them for a longer tenure, automatically the interest rates will increase. 
• There is a lack of flexibility is there when it comes to buying these unsecured loans, being offered to the applicant. 
• These unsecured loans are supported only by trust; hence you are on the more risk from the lender's point of view. 

How to choose wedding loans?

 Your decision to take Marriage loan should be based on the following factors: 

 Interest Rate: The interest rate is one of the most important factors to be taken into consideration while taking any type of loan. There are loans available for individuals with bad credit as well. Interest rates determine financial planning. And how much total money required.

Loan tenure: You can easily choose tenure to repay the loan amount, from 1 month to 6 years. You need to pay more rate of interest if you select a longer tenure to repay the loan. Your loan tenure also plays a key role. Higher the tenure lower would be your monthly payments.

Loan Amount: Minimum loan amount should be applied to manage all the expenses.

Hidden charges with interest rates: Banks also charge various fees which are also taken into consideration while selecting for the wedding loans. These include: 

Processing Fee: This typically is in the range of 2%-3%.                                                                                                       
Pre-payment penalty
EMI bounce charges
Late payment penalty

Popular Banks offering Marriage Loans –

Almost all the banks and non-banking financial institutions are offering Marriage Loans under Personal Loan scheme.  Among several lenders, SBI, HDFC, ICICI, Bank of Baroda are prominent.

We will discuss in brief about two of the most popular marriage loans here- 

A) SBI Marriage Loan 
Some notable features of the SBI Marriage Loans are –

• The minimum loan amount you can borrow is Rs 24000 for metro/urban areas and Rs 10000 for rural/semi-urban areas. 
• You can get a maximum loan of up to 12 times your NMI (Net Monthly Income). 
• SBI personal loan offers flexible repayment tenures up to 48 months .
• Self-employed individuals need to show a minimum two years of experience in their relevant fields.
• You are not required to pledge any security/collateral. 
• The documentation procedure is absolutely simple and hassle-free. You just need submit a few basic documents only. 
• The SBI does not levy any prepayment charge upon you. 
• SBI charges a nominal processing fee in the range of 2% to 3%, in addition to the service tax as applicable. 

      
     B)  HDFC Marriage Loan 
      Some notable features of the HDFC Marriage Loans are- 

•     HDFC marriage loans are highly flexible. You can avail such a loan for any wedding related expenses. No restrictions are imposed on the intended use of the funds. 
•     You can avail the funds instantly. If you are an HDFC customer, you can avail a pre-approved loan in just 10 seconds. The funds will be disbursed to your account with no or little documentation. You can get this loan under 4 hours if you are not an HDFC customer. 
•         For availing this loan, you need to be in the age group of 21 to 60 years.
•     If you have a good credit history, an HDFC marriage loan will be available to you at highly competitive interest rates( as low as Rs 2187 per lakh).
•     You can repay the HDFC Personal loan in affordable EMIs over a flexible loan tenure of your choice. As an usual practice, you can choose any tenure in the range of 1 to 5 years. 
•     You are not required to pledge any security/collateral. 
•     The HDFC Bank levies a processing fee of 2.5 % of the loan amount.

 GUEST AUTHOR NAME : RAHUL KUMAR

 EMAIL: rahulafinoz2@gmail.com

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