The wedding day is undoubtedly one of the most important days of one’s life. And so, people make an effort to make it as special as possible.
However, weddings cost money, and that needs to be planned for. And if you do not have personal savings, a loan is an option to consider funding a wedding.
The first thing to do is to get an idea of the total budget. This will depend on a lot of factors like venue, food, cost of dresses and decoration, and so on. It is important to be careful here because it may not make sense to plan a very lavish wedding, especially when taking a loan.
Understanding Wedding Loans
Wedding loans are tailored by banks to cover wedding expenses with various terms and conditions. Though called a wedding loan, it is nothing but a personal loan. And since it is an unsecured loan, the interest rates are high.
For instance, HDFC Bank offers loans between Rs 50,000 and Rs 40 lakh, with repayment periods of 12 to 60 months. These loans are unsecured, meaning no collateral is required, and eligibility is based on your salary, employer, and a minimum income of Rs 25,000 for HDFC salary account holders or Rs 50,000 for non-account holders.
Similarly, ICICI Bank provides loans from Rs 50,000 to Rs 50 lakh at interest rates starting from 10.85 per cent, offering flexible tenures of up to 72 months with minimal documentation and no collateral. A processing fee of up to two per cent applies.
Kotak Mahindra Bank offers loans from Rs 50,000 to Rs 35 lakh, with processing fees of up to five per cent and foreclosure charges of four per cent if repaid within three years and two per cent afterward.
“With minimal paperwork, especially through online applications, the process becomes efficient and fast, allowing borrowers to focus on planning the wedding rather than stressing about finances,” says Amit Bansal, Founder, Bharatloan, a fintech company.
Also, the biggest advantage of such loans is their flexibility—they allow for lower initial EMIs or flexible repayment options, which is ideal considering the high expenditure during a wedding. “As the financial situation improves, borrowers can choose to increase the payments, making the loan adaptable to their needs,” says Bansal.
It Pays To Be Careful
When planning a wedding and considering a personal loan, individuals must identify secure and reliable lending players. “Trustworthy lenders not only offer transparent terms but also ensure that borrowers can access funds without hidden fees or unfavorable conditions. It's important to research the lender’s credibility, check their customer reviews, and ensure that they are regulated by relevant authorities,” says Vikkas Goyal, Founder, Rupee112, a fintech company.
While wedding loans are easily accessible, it's crucial to use them wisely and not go overboard.
“Avoid borrowing more than necessary just because you qualify for a higher loan amount. Consider your future financial commitments, including post-wedding expenses, and ensure that your EMIs are manageable within your regular budget,” says Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution, a loan distributor.
Proper financial planning will allow you to enjoy your big day without compromising your long-term financial health.
