Getting married is a ‘once in a lifetime’ occasion for most and the millennial couples are often keen on making it memorable. There are a few who prefer to have a simple wedding, but the general tendency is to have one with a lot of fancy events lined up with family and friends. In case the income of the couple is not adequate for such extravagance, they can approach several financial institutions to avail of a marriage loan devised just for them.
Financial inadequacy need not come in the way of your dream wedding and you can organize all the events you want with the help of a marriage loan. Because there are a large number of functions and events held on the wedding day. The popular events that the millennials prefer to include in their wedding celebrations are a pre-wedding photo-shoot, a bachelor party, a glamorous reception, a destination wedding, celebrity events, premium catering, and much more. A loan can help you achieve it all.
Before you apply for the loan, you must gather all the necessary information about the same. Below are a few important points that you must be aware of:
Questions Must Be Answered Before Availing Wedding Loan:
- What Is a Marriage Loan?
When applying for a marriage, you can choose to take a personal loan with the reason for the application specified as “wedding expenses”. Alternatively, you can approach the lenders for a marriage loan. These have different specifications and are customized for the purpose of weddings.
- What Are the Charges Involved?
The interest rates for a marriage loan are generally on the higher side. They start at 11% and can go as high as 36%. The loans provided to cover marriage expenses are unsecured and this is the reason for the high rates of interest. The rate of interest is decided depending on the eligibility criteria of the applicants. The factors that impact the rate are the credit score, source of income, and repayment history.
Other than the interest, you would need to pay up a processing fee upfront which could range between 1-3% of the approved loan amount.
- Is There Any Way to Reduce the Burden of the Loan?
If the loan is taken jointly by the partners, it helps to reduce the burden of the loan. This facility is also available from the lending institutions. When applying for a joint loan, you can also expect a higher amount to be approved. Both partners have to ensure that the payments are made regularly. This is important as it would impact the credit scores of both partners, either positively or negatively.
- What Are the Repayment Terms of the Loan?
The loan taken for the purpose of marriage needs to be repaid within a maximum tenure of 60 months. You can choose the tenure and hence the EMI value. When doing so, you must consider an amount that you can comfortably pay every month. A personal loan calculator can prove to be very helpful in determining the EMI for a certain tenure, principal, and interest rate. It is a good idea to study the terms and conditions of the loan, the applicable interest rates, and repayment schedule across different financial institutions before choosing your lender.
- What Are the Prepayment Terms?
If you have the capability of repaying the loan earlier than the loan tenure, the option is available. In this instance, you could be required to pay a penalty charge of 0-7%. This will vary from one lender to another. This penalty is charged because the lender would face a loss in interest receivables from you. The penalty could be higher if you wish to close the loan even before the lock-in period is over.
Hence, planning a wedding can be fun for the children, adults but for guardians, it can be stressful if the funds are not available. The dreams cannot be fulfilled due to the unavailability of the funds. So, go ahead, apply for the loan, and get the dream wedding you want. But do not forget to check the eligibility criteria first and also compare the interest rate of different lending institutions that provide wedding loans. Then choose the best which suited you.
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