The demand for a wedding personal loan increased by 40% in 2021. Even during the COVID-19 pandemic, the demand for wedding personal loans was on a rise. A person who is thinking about obtaining a personal loan for marriage wonders “Is it beneficial to take a wedding personal loan?” or “Is it a good idea to take a personal loan for marriage?”. We have tried to answer all these questions by explaining the advantages and disadvantages of a wedding personal loan.
What exactly is a wedding personal loan? What does it require?
A personal loan for marriage is a type of personal loan. It is a financial product. It allows people to obtain the required funds for managing the expenses of a wedding. A wedding personal loan helps you to make the best possible wedding arrangements without worrying about the funds.
Indians love to conduct grand weddings. So banks and other financial institutions operating in the country offer marriage loans. The basics of such personal loans are the same as any other personal loan. The applicant gets a sum of money that they need to repay in equated monthly instalments over a period. Various factors, such as the principal amount, rate of interest, and tenure are decided beforehand.
Advantages and disadvantages of a wedding personal loan
Just like every financial product, a personal loan for marriages also has its pros and cons. You should know about them if you are planning to get a wedding personal loan.
Let us discuss all the advantages and disadvantages of a wedding personal loan that can enable you to make a better decision.
Advantages of taking a personal loan for marriage
1) No requirement for collateral or security
A wedding personal loan is an unsecured loan. You do not have to provide any of your possession as collateral to the bank. Many people willing to get a loan for marriage can’t provide collateral or security. Taking a wedding personal loan is beneficial for such people.
2) Reasonable interest rates and foreclosure charges
Interest rate is one of the factors that become a cause of worry for a lot of people applying for a loan. The interest rates associated with a wedding personal loan are reasonable. Several banks and financial institutions offer personal loans for marriage. So, the rates are quite competitive.
Thus, you can choose a lender that provides a loan at the lowest interest rate. The foreclosure charges are also reasonable. You can foreclose the loan if you feel that you have the required amount. It will help you to avoid paying EMIs for the rest of the loan tenure.
3) Desirable loan amount and tenure
Weddings involve various expenses. They could be invitation cards, accommodation for guests, welcome gifts, venue for ceremonies, decoration, caterers, apparel, jewellery, photography, videography, music equipment, live performances, vehicles, chauffeurs, and cleaners.
Even estimating the total cost can be overwhelming. You should always apply for an amount higher than anticipated. You can get a wedding personal loan for the desired amount depending on your credit score.
Just like the amount, you also get flexibility in terms of tenure. You can choose the tenure that suits you. If you want to pay off the loan quickly and can pay high EMIs, you can choose a shorter duration. But if you can’t pay high EMIs, you can choose a longer duration.
4) Seamless application process and fast disbursal
The application process to obtain a personal loan for marriage is simple. You can complete the process smoothly. Just go to the nearby branch of the bank or visit their website. Wedding personal loans usually involve minimal formalities. You just need to provide the required details and the necessary documents.
Any financial institution takes very less time to approve an application for a wedding personal loan. You can get approval within a week. Once you get approval, the amount will be disbursed in 24-48 hours.
5) An opportunity to build CIBIL score
Whenever you apply for a loan, your credit score is checked. You cannot build a credit score unless you take a loan. If you have never taken a loan before, taking a personal loan for your marriage gives you a chance to build your credit score. If you already have a credit score and your partner doesn’t, you can add them as co-applicant in the loan application.
Disadvantages of taking a personal loan for marriage
1) Lower amount and higher interest than secured loans
A wedding personal loan is an unsecured loan. So, the amount you might get would be less than the amount of any secured loan. The interest rate charged on the loan would be higher than the interest rate charged on any secured loan.
2) Requirement of an impressive CIBIL Score
A personal loan for marriage is an unsecured loan. This fact is also considered when it comes to checking the CIBIL score. Unsecured loans are given based on trust and credibility. Therefore, the applicant must have a high CIBIL score.
3) Significant amount of research
A wedding personal loan is a common financial product. You can come across numerous lenders who provide this loan. You need to conduct thorough research to find a lender who provides the maximum possible amount at the lowest interest rate.
You should also consider various factors. These are flexibility in tenure, processing fees, approval and disbursal time, documentation, foreclosure charges, EMI bounce fees, and hidden charges while considering the lenders.
4) Planning the monthly budget
Newly-wed couples have to face various expenses. These are honeymoons, parties, and return gifts. You must plan your monthly budget before availing of a wedding personal loan. You should make sure that you will be able to handle the financial obligations related to the loan after your marriage.
5) Emotional burden and mental stress
A personal loan for marriage also causes financial, emotional and mental stress. It might be difficult for some newly-wed couples to handle the stress amidst the responsibilities that occur after marriage.
A wedding personal loan is useful to pay for wedding-related expenses. But you should acquire the required knowledge and show due diligence while applying for a loan. You need to choose the lender carefully. For example, Piramal Finance is a reputed financial services company. It offers different types of loans including wedding personal loans.