Weddings are a milestone in life, and rightly so. They mark the beginning of a new phase and bring together two families. That said, Indian weddings tend to be lavish and could cost a fortune. According to a recent survey, the average cost of an Indian wedding in 2022 was around ₹20 Lakhs.
This massive expense can be hard to manage and requires proper financial planning. An easy way to go about this is by opting for a marriage loan. This is a type of personal loan that has no end-use restrictions.
However, before availing a personal loan to meet your wedding expenses, it is always ideal to discuss the same with your family. Remember, an obligation like a personal loan could affect the finances of your whole family. So, it is best to ask your family these basic questions before opting for an unsecured form of credit.
5 Questions You Need to Discuss Before Availing a Marriage Loan
Here are some vital questions to discuss with your family before applying for a personal loan to fund your wedding expenses.
What is the Ideal Loan Amount Required?
Whether you avail a personal loan or any other form of credit, it is essential that you borrow only the required amount. Borrowing more than you need only increases the overall costs and interest outgo.
The marriage loan amount entirely depends on your wedding plans and the budget allocated. While borrowing funds could help you manage large wedding expenses, you must discuss the amount you plan to avail.
For instance, a lavish wedding will have several events. This could quickly rack up the cost, especially if other necessary expenses are involved. It’s important to know these details before deciding on a loan amount.
Taking valuable insights from your family, you can plan a wedding budget and decide on the loan amount required. Additionally, you could check if you meet the personal loan eligibility criteria set by the lender to avail this amount.
Remember that your personal loan amount is determined based on various factors such as your age, employment type, credit score, and history, to name a few. For instance, if you are opting for a Bajaj Finance Personal Loan, you could get an amount of up to ₹40 Lakhs. Similarly, you could avail up to ₹25 Lakhs if you opt for an Axis Bank Personal Loan.
What is the Timeline for the Repayment of the Loan?
Another crucial factor is the repayment period of a marriage loan. When you avail any form of credit from a lender, you need to repay the borrowed amount within a specific tenure.
Improper planning regarding the tenure could affect your future financial well-being. Knowing how long you will be tied to this financial obligation is critical.
You can raise this point when discussing the necessity of a personal loan with your family members. This can help you understand the short-and-long-term impact of borrowing the amount.
Opting for a shorter timeline could help you repay the loan quickly, but this would also lead to higher monthly instalments. On the contrary, if you opt for a longer duration, the EMI amount will be reduced. However, the interest outgo would increase.
Hence, you need to consider both scenarios before choosing a personal loan tenure.
Can the Responsibility be Shared Among the Family Members?
Opting for a marriage loan is a huge commitment. While the responsibility of repayment will fall onto just one person, there may be instances where others could also share the financial obligation.
This could take the pressure off a single person, allowing each family member to make small contributions. Sharing the responsibility of repayment can help you manage expenses even after the wedding. Here, you can check for a joint loan offer to get better terms.
Ensure that you compare the personal loan interest rates provided by various lenders before zeroing in on a loan offer. For example, a Bajaj Finance Personal Loan comes at an interest rate starting from 13.5% p.a. Meanwhile, the interest rates for an Axis Bank Personal Loan starts from 10.49% p.a.
While the final rate depends on your profile and creditworthiness, ensure you get the most affordable loan possible. This will help make repayment more affordable.
How Will Your Marriage Loan Affect the Existing Family Finances?
This is another important question you need to discuss with your family before availing a marriage loan. While opting for credit could help you plan a grand wedding, be careful not to forget about other financial goals.
This includes obligations such as home renovation, medical bills, or education costs. Thus, you need to consider the existing family finances before applying for a loan.
The financial commitment of repaying your marriage loan should not affect your or your family’s future plans. Hence, it is important to discuss these pointers with your family and make the right choice.
Which lender to opt for?
Different banks and NBFCs have their own terms and features when it comes to personal loans which have been customised for weddings. So, choosing the right lender from whom to avail a marriage loan is important. Discussing this with your family could help you shortlist your options.
After all, each family member may have existing relationships with lenders. Approaching a known lender could come with advantages, such as getting a pre-approved offer or quicker loan disbursal. If your family members have a large investment or many years of prior dealings, you could find a more cost-effective option, too.
Apart from this, discussing lenders with your family can help you assess the terms and conditions better. Choosing a lender who offers a large loan amount, without hidden charges, and provides good customer service can be a boon in the long run.
Asking these questions before applying for a marriage loan is crucial. Discussions with your family could help you make the right decision. Once you decide on the parameters mentioned, you can finalise a lender who offers the loan on favourable terms. This will help you avoid unnecessary financial stress before and after your memorable wedding day.