With social media full of pleasant wedding photographs, young couples increasingly are tempted to have extravagant weddings. Many are taking out wedding loans, believing they can create great memories without worrying about future financial concerns. As Gen Z and millennials embrace this trend, they must find a way to balance their ideal weddings with debt management.
CA Ujjwal Gadhvi, a finance content creator, says, "In India especially, there is a huge pressure to host lavish weddings. Taking a loan to spend on a lavish wedding can often make one spend beyond their means, thus starting a cycle of debt which may turn vicious. Repayment of a wedding loan can slow down other financial goals, such as buying a home, saving for children’s education, or investing for retirement."
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Rise of Wedding Loans
The trend of wedding loans is on the rise. According to the IndiaLends Wedding Spends Report 2.0, conducted in October and November 2023, approximately 26.3 per cent of brides and grooms planning to self-fund their weddings are considering personal loans. Among those contemplating borrowing, 67.7 per cent plan to take loans between Rs 1 lakh and Rs 5 lakh. This interest arises from couples' desire for unique experiences and customization in wedding preparations.
Balancing Wedding Costs and Financial Stability
As wedding costs continue to rise, young couples must balance their lavish celebration desires with their long-term financial health. The expenses associated with venues, catering, elaborate decor, and entertainment can accumulate quickly, prompting many to seek financial assistance. A reasonable wedding budget must be determined by taking a close look at their entire financial status.
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Ujjawal also highlighted, “Both should have at least one stable, steady and reliable source of income. Having a good credit score is crucial, an unhealthy credit score can make procuring a loan difficult. Couples need to be on the same page regarding financial goals and should consider family support. Lastly, they must be aware of the emotional toll debt can take.”
Alternatives to Wedding Loans
Couples who want to have a wonderful wedding without going into debt must budget effectively. Couples should prioritize their wedding expenses and seek for methods to save costs while maintaining their goal. This might include picking local venues over tourist locations, establishing payment plans with suppliers, or cutting out non-essential products.
Ujjwal states, “If possible, getting married during off-peak seasons can help get more reasonable rates for venues and vendors. If the couple/family is agree with it, try to combine redundant events into one big celebration to save on unnecessary expenses and venue costs. This may sound a bit too much but try to consider a smaller guest list. An intimate celebration with only your close friends and family members who have been and will be with you during thick and thin is not a bad idea at all. Setting up a contingency fund for any unexpected surprises can be thought of.”
