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How Personal Loan can help You Plan a ‘Big Fat Wedding’


The wedding season is here! A number of homes in India must be overwhelmed with the preparations of a loved one’s wedding. A big fat marriage celebration in India can extend over a week. From dresses and jewellery to food and gifts, the cost of Indian weddings can be equally overwhelming.

Earlier, people used to borrow from their friends and relatives to tide over the expenses of a wedding. But, nowadays several banks and financial institutions offer personal loans to help you plan your dream wedding. Some private lenders prefer to call them ‘wedding loans’ but they are a part of their personal loan offering. Being an unsecured loan, the rate of interest will be higher than that on a secured loan but it may vary as per the credit profile of the applicant.

A personal loan in the form of wedding loan can be helpful in the following ways-

  • It is the simplest and easy to borrow loan.
  • You do not need to pledge any of your assets as collateral.
  • You do not need to flash an engagement ring or a wedding invitation card to get approved for the loan.
  • Minimal documents are required for the loan.
  • Amount will be disbursed to you within 3-5 working days or less making it easier to plan for your wedding in advance.

So, a personal loan might have made it easier for you to arrange that fairy-tale wedding you always dreamed of. But is it really worth taking?

To splurge or not to splurge, that is the question.

Before you decide to take a personal loan for marriage, you must have a clear idea in your mind about what kind of wedding you expect. Ask your partner about his/her aspirations, what type of marriage he/she has pictured. Whether you are a man or a woman, you wouldn’t want your parents to exhaust all their savings on your marriage which they could have saved for their retirement. Moreover, a loan will stay with you for a few years down the line (based on the tenure) and in that period your borrowing capability will be limited.

Let us talk about a few things you should do before taking a wedding loan-

1- Prepare a Marriage Budget

Planning the finances in advance is always helpful, especially in case of pomp and show weddings. Indian wedding expenses may range from a few lakhs to even a few crores in some cases. You must set a budget range for the wedding. Divide the expenses into categories like clothes, venue, caterers, gifts, etc. In case you are hiring a wedding planner, negotiate and set the budget well in advance so that you have enough time to arrange funds for it. If you are planning to meet a portion of the expenses with your savings, find out the deficit and take a loan for only the shortfall.

2- Explore other Loan Options

Personal loans are easy and quick but they come with a cost, comparatively higher than a secured loan. You must explore other options such as loan against securities or assets. Particularly, borrowings that are secured against assets or deposits tend to have lower rates of interest. If you are ready to pledge an asset for a loan, it would be a better choice. Top up home loan, loan against property or gold loan- all can be worthy alternatives. If your savings can make up for a better part of the expenses, a credit card loaded with benefits can also be of great help.

If you still cannot decide whether taking a personal loan for your marriage is a good idea, you should ask yourself a simple question- “Are we ready to start our married life with a debt?”

The answer to this question will depend on your current financial situation- whether you have loans for which you are already paying EMIs, whether you have enough savings for emergency situations or not, whether your credit cards have enough limit and other such scenarios. Look at your combined financial obligations.

In case you choose to take a wedding loan, here are a few practices that can help you grab a better deal at a low rate of interest-

Go to Your Own Bank for the Loan- Banks consider their existing customers loyal candidates and hence there are higher chances of getting a personal loan at lower rate. Choose a bank where you have your savings account or deposits.

Discuss Terms of Prepayment in Advance- After marriage, the family income will consist of both your incomes and you might find it easier to pay off the loan in full or part before maturity. Hence, it is always advised to discuss the terms and conditions related to prepayment of personal loan.

Maintain a Good Credit History- In case you have enough time between your engagement and wedding, you can work towards a better credit score by paying all your bills on time. People with a higher credit score are likely to get lower interest rate on personal loans.

Do Not Change Jobs- People having a stable job are considered to be more creditworthy by the banks. So do not change too many jobs before you plan to take a personal loan.

A wedding loan can be really helpful in planning your dream wedding. However, you must weigh the pros and cons carefully to find out what is best for you.

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