The Marriage Loan: Why Use A Personal Loan To Fund A Wedding

A wedding is an important event for all the people involved. Many of us always dream of a perfect wedding where all our arrangements and plans come together for the perfect union of two people. To make this dream a reality, some sort of financial backup is essential. And one of the best ways to get your dream wedding organized is to get a marriage loan. A marriage loan can get you sufficient funds to ensure that you have a wedding day to remember.

The eligibility criteria may differ from lender to lender, and it may be different for different applicants, depending on their income, financial status and age. Some common criteria are as follows:

1. Age The minimum age of a salaried individual applying for a marriage loan is 23 years of age, with some lenders going up to age 23 years in this regard.The maximum age of a person looking for a marriage loan can be 60 years if they’re salaried, whereas self-employed persons can avail of a marriage loan up to 65 years of age.
2. Monthly Income The minimum monthly net income must be around Rs. 15,000 to Rs. 25,000 if one is to avail of a marriage loan. The exact figure depends on which city one is living in as well as other factors like a lender, age etc.
3. Employment Type Both salaried individuals, as well as self-employed ones, are eligible to apply for marriage loans. Salaried persons must be employed for at least two years and have a steady income to be considered for marriage loans.
4. Credit Score A CIBIL score of 700 and above is quite favourable with lenders and is bound to get your loan approved. A lower score may also get you a loan but at a higher interest rate.

A marriage is simply a personal loan that is designed to help you pay for any expenses related to your wedding. A marriage loan can be used to pay for expenses like booking a venue for the wedding, the catering services, gifts for relatives, decor, jewellery etc. A wedding loan is an unsecured loan, which means no security or collateral is needed.

Interest rates for marriage loans vary from lender to lender. The approximate range of interest for a marriage loan can be between 11% to 24%. It is dependent on a lot of other factors like your income, credit score, loan amount etc.

When it comes to marriage loans, no two individuals’ rate of interest will be similar. The interest rate for a marriage loan depends on factors such as:

• Your income
• Credit history
• Credit score
• Type of employment
• City of residence
• Your employer’s reputation
• Your relationship with the lender

All the above factors can affect the interest rate for your loan.

You do not have to accept the first interest rate that is offered by a lender. Follow the given tips below and aim to get a lower interest rate for your loan:

• Improve your credit score
• Check for seasonal offers on loans
• Keep a good credit history by repaying your credit card bills and EMIs on time
• Compare the rates offered by different lenders
• Negotiate with the lender for a lower interest rate

The total interest payout on your loan is the total amount of interest you pay for your marriage loan. Here’s how you can reduce the total interest payout:

• Opt for a shorter tenure for your marriage loan
• Since interest is calculated on your loan amount, consider reducing your loan amount by only availing the loan for what you need and cut down on extravagant expenses.
• Negotiate for lower interest rates to ensure reduced total interest payout

A flat interest rate is a fairly simple type of interest. A fixed rate of interest is decided on the total loan amount, and the interest remains the same throughout the tenure of the loan. A reducing balance interest rate is a type of interest that is only calculated on the outstanding balance of the loan. So, when you pay your EMI, the interest is applicable on the remaining amount to be repaid.

Documents Required for Marriage Loan

• For salaried individuals: Form 16, salary slips or bank statements
• For self-employed: IT returns for the past two years, bank statements for the last 6 months

1. Valid ID Proof like passport, Aadhar card, driver’s license, voter’s ID etc
2. Valid Address Proof like passport, driver’s license, Aadhar card, utility bills etc.
3. Proof of age
4. Income proof

To calculate your marriage loan EMI, you can easily use any of the numbers of EMI calculators available online. Most banks and NBFCs have a loan EMI calculator on their websites that can be used to calculate EMI. Simply enter your total loan amount, tenure and rate of interest, and the calculator will show you the EMI that you’re required to pay.

The loan verification process for a marriage loan consists of 4 stages:

• Loan Application The first step involves filling out the loan application form correctly. The lender requires a loan application to begin the loan process.
• Document Collection The next step involves the collection of all relevant documents. A bank representative may collect them from you in person, or you may submit them online.
• Document Verification Once the lender has all your documents, they will begin the document verification process. Your place of residence as well as your place of employment will be visited by a representative to verify your details and ensure everything is in order. The representative will then forward their findings to the loan officer assigned to your application.
• Sanctioning of Marriage Loan Once the loan officer receives a positive report, they will begin the process of loan disbursement , and you will get the loan amount in your account within 24 hours.

You can avail of a maximum marriage loan of up to Rs.50 lakh, depending on the lender. The amount of loan you can get also depends on:

• Your income
• City of residence
• Repayment capability
• Credit score
• Credit history

Marriage loan EMI can be paid in the following ways:

• Auto-Debit The EMI will be debited automatically from your bank account every month
• Pay by cheque You can pay your EMI via cheques
• NEFT/IMPS Transfer You can also pay your EMI through internet banking.

• Go for a longer tenure
• Decrease Loan amount
• Negotiate for a lower interest
• Get lower interest marriage loans

• Processing charges Around 0.5% to 2.5% of the loan amount can be charged by the lender as processing fees.
• Verification charges Before sanctioning the loan, the lender has to verify your credentials, and they also charge a fee for the same. This fee is called the verification charge.
• Goods and Services Tax For additional services, the loan applicant is also charged GST.
• Penalty for late payment Late payment of EMIs may attract a late payment penalty.
• Penalty for prepayment or foreclosure If you opt to repay your loan before the tenure is over, the lender may charge you a prepayment penalty.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.