Do you have your wedding to look forward to? Are you prepared with all the finances to manage the wedding costs or falling short of funds? If it is the latter, then you can consider a personal loan to cover the cost of marriage celebration. If you have sufficient savings or someone to foot part of the bill, then you may not need to borrow, but sometimes you may want additional funds to meet the personal expenses of your dream wedding, and for that, a small financial help can come to the rescue at the right time.
But before taking the decision to borrow, it is important to weigh the pros and cons of weddings loans so as to take an informed decision. Are there ways to cut the marriage cost and opt for a smaller wedding instead? Which bank or NBFC to approach for the funds? Will you be able to afford the EMIs? These are some of the considerations to think about before opting for a loan.
So, depending on your financial needs, you may decide how much to borrow and how to go about arranging the finances for your wedding. Below, we have mentioned some of the factors you must analyze before choosing a personal loan for marriage expenses, and the pros and cons of the same.
Pros of a Personal Loan for a Wedding
Below-given are the benefits of a wedding loan.
- Quick Approval and Disbursal: A wedding loan takes just about 48 hours to 72 hours for approval and disbursal. Thus, you can get the funds in a matter of a few days without any delay or a waiting period. All you have to fill the loan application form and submit the documents and get approval on the loan in a jiffy, with funds in your bank account in a few days. This means you can plan the marriage better and take timely decisions of booking a venue, planning your honeymoon, paying the decorators, hiring caterers, etc.
- No Dearth of Lenders: You may wonder exactly whom to approach for the funds? But, a wedding loan is provided by almost every major bank and NBFC today. Thus, it gets easier to compare and apply for the best loan offer that suits your pockets and requirements. You can compare the interest rates, fees, and other terms and conditions on the loan, before taking your pick.
- Use the Funds as You Wish: A wedding loan is a multi-purpose loan. It is also unsecured in nature, which means you do not have to submit collateral to the bank. There are no specific restrictions as to how to use the funds. You can utilize the funds to pay for wedding invitations, lodgings, outfits, catering, banquet halls, makeup artistes, flight tickets, etc, as per your wish. If you want to allocate a part of funds for any other purpose other than your marriage, you can even do so, and the lending institution will not ask any questions.
- Fixed Instalments: A personal loan is an instalment loan with a fixed rate of interest and up to a fixed period. Thus, you will know the exact amount to pay every month till the end of tenure, and plan your monthly budget accordingly. If you pay the EMIs regularly, then you can repay the debt comfortably without worries.
- Sufficient Amount to Borrow: Another benefit of a personal loan for marriage is that you can borrow as little as Rs. 1 lakh to as much as Rs. 1 crore. So, if you want a small celebration and need just a few lakhs, or you want a grand celebration and need huge funding, a personal loan is the right option for your needs.
- Improves Your Credit Score: If you make regular payments towards the wedding loan, then your credit score will significantly improve. Thus, the fund not only will help cover the wedding cost, but advertently boost your creditworthiness. So, when you need a new loan in future, your clean credit history will help fetch lower rates of interest and better deals from financial institutions.
- Saves from Liquidating Investments: Are your parents willing to use their retirement funds to sponsor your wedding? Are you considering liquidating a long-term investment that promises good returns to pay for your wedding expenses? Then drop this thought and switch to a personal loans, which you can independently handle without eating into the monetary savings of your parents or your financial investments.
Cons of a Personal Loan for a Wedding
Below-given are the disadvantages of a wedding loan.
- Additional Monthly Expense: A debt-free life is always preferable. Taking any kind of loan will bring additional financial burden, which you will want to do without. However, if you take a wedding loan, it is best to stick to a strict monthly budget and cut back on unnecessary expenses to bear the EMI amount.
- Not the Best for People with Poor Credit Score: If you do not have a good credit score of 750+, then the rate of interest will be high on a personal loan, increasing the borrowing cost. Those with no credit history at all may also face the brunt of higher rates of interest. Additionally, a personal loan interest rate is on the higher side given that it is an unsecured form of borrowing.
- Not Good If You Have Too Many Ongoing Loans: If you are already knee deep into debt with several ongoing loans, then it will be better to skip a wedding loan and find ways to cut back on the celebration cost, so that you can manage the expenses on your own without a new loan. Also, if a majority of these loans are unsecured in nature, then opt for a secured loan rather to create a good credit mix.
- Part Payment and Foreclosure Fee: A wedding loan may come with part payment fee if you want to partly pay off the debt or foreclose the loan before its tenure. This may prompt you to carry the debt till the end of the tenure, even when you can close the loan beforehand.
- For Salaried Individuals Only: Most of the times, lenders provide personal loans to salaried individuals only, and not to self-employed people or professionals. There could be specific scheme for a wedding loan by a few banks, but that is one of the factors to look into.
Should You Take a Personal Loan for a Wedding?
A personal loan for wedding could be one of the best solutions to pay for the marriage celebration expenses. But, you need to carefully go through the pros and cons and consider the risks of each, and take an informed decision so sail through your finances smoothly.