A wedding commemorates a new beginning, and encompasses many memorable moments. Everybody dreams of having a beautiful wedding, some in the most extravagant of styles. Almost everything about the occasion has to be seen to, from small things like flowers for the final day to big decisions like which band to hire.
A big-fat-wedding can cost a fortune.
You may have set aside a sum for your wedding, by saving a little bit of your salary every month. But, is that sum enough to cover all your marriage expenses?
A lot of banks and non-banking finance companies (NBFCs) offer tailor made wedding loans to meet your celebration’s needs.
A personal loan does not require you to provide a guarantee or collateral, which is why it’s fairly easy to apply for a marriage loan.
Before you apply for a wedding loan, draft out a budget for the ceremony. A majority of finance usually goes toward the venue, food, jewellery, gifts, and stay and conveyance of guests. Apart from these, an array of small but trivial expenses do pop up.
The first thing to do is calculate an estimate of how much you will need to borrow. Once you know the amount you want, you should keep in mind a few other important details.
Knowing the eligibility criteria in advance will allow you to be well prepared. Most financial institutions include the following criteria for a wedding loan:
- Age: A minimum of 21 years (23 in some banks), and a maximum of 58 years (for salaried employees) and 65 years (for self-employed person)
- Minimum net monthly income: Depending on the city you are in and the financial institution, individuals will need to have a minimum monthly income to apply for a loan
- Employment type: Salaried employees or self-employed professionals
- Employment status: Both, salaried or self-employed people, should have proof of income for at least 2 years prior to applying for the loan. They must also have proof of receiving a regular income from the current employer (or business) for at least 1 year
- Credit score: Most banks prefer a CIBIL score of between 700 and 750
Financial institutions require a few important documents before they can approve a loan. These documents are basic paperwork that assure banks and NBFCs of your eligibility and ability to pay the premium and interest amounts.
These papers usually include:
- Valid identity proof: This document is a must for any bank or NBFC as it tells them you legally exist and are recognised by the government.
- Valid address proof: These include documents like a passport, voter’s ID card, ration card, electricity or telephone bills, domicile certificate with address mentioned by the municipal corporation, and registered rent or lease agreement.
- Proof of Age: Although a valid ID card has your date of birth, in case it doesn’t specify this detail, you may have to submit it separately.
- Financial Documents: The bank requires these documents to ensure you are fit to repay the loan. These include:
- For salaried person: The salary account statement for the last 3 months, and the latest salary slip showing statutory deductions or Form 16
- For self-employed person: The audited or certified PL account and balance sheet, acknowledged income tax returns for last 2 years, and bank statement of the primary account for the past 6 months
- Interest Rate
Not only do interest rates vary from bank to bank, they can also be based on the eligibility of the applicant, which is why the loan amount sanctioned and the amount to be re-paid differs from person to person.
Before you decide on the financial institution you want to apply for your loan at, check their interest rates on personal loans. You can use a personal loan interest calculator to determine the rate they may charge you and the amount of sum you will end up repaying.
EMIs will also help you determine whether you should go for a long term or a short term loan. If you choose to go for a short term personal loan, you may end up paying higher monthly payments, but the interest rate over the life of the loan will be lower.
- Features & benefits
It is fairly easy to acquire a marriage loan from banks as it is more or less a personal loan. These loans can be sanctioned within 48 hours of putting in an application and the loan amount can be disbursed within 2 working days, after approval.
Today, banks even offer plans that can be customised especially for you, charting out the duration and rates as per your benefit and eligibility. They even offer a flexible tenure, ranging from 12 months to 60 months.
In a country like India, where a wedding is a big affair, it becomes quite a necessity for you to consider even the tiniest of details. For this, you need to be well prepared. So, opt to get a loan to finance your wedding and put financial worries to bed. This would open up your schedule to the other aspects of a picture-perfect big day.