Given the lavish nature of Indian weddings, people must manage their wedding budgets carefully. You can get a marriage or wedding loan, also known as a Personal Loan for a Wedding, to manage your wedding expenditures. You can apply quickly for such a loan after determining your Marriage Loan eligibility and choosing an appropriate repayment tenure using a Personal Loan interest rate calculator.
Before looking for a Marriage Loan, you must understand their workings:
Don’t Borrow More Than You Need
Although you are permitted to use the maximum amount available for a Personal Loan for a Marriage, doing so is not recommended. To determine your exact financing requirement and to comprehend your spending, you should carefully review your wedding budget. Never borrow more than is necessary because doing so might damage your finances and keep you in a protracted cycle of EMI payments.
Know About Interest Rate and Cost of Processing First
Marriage Loans are unsecured loans used to pay for various wedding costs, and come with hefty significant rates on them. Wedding loan interest rates start at 11%, and this can rise to 24–25% depending on credit score, history of repayment, sources of income, creditworthiness, etc. Other than this, processing costs for Marriage Loans that range between 1% and 3% are applicable (excluding taxes).
Using a Personal Loan calculator can help you get insight into the wedding loan interest rates and loan amounts to determine how reasonable your Marriage Loan payment will be.
- Divide the number of EMIs you will make each year from your interest rate. For example, your EMIs are divided by 12 since interest rates are levied annually.
- Then multiply it by the loan balance. So, your whole principal amount will be your wedding loan balance if this is your first payment.
The amount of interest you’ll have to pay in the first month is the result.
It would help if you determined your new balance to see the interest you will be paying in the following months.
- Subtract the EMI amount from the first-month interest. The remaining sum is paid to your principal loan balance.
- Calculate the new loan balance by deducting this sum from the initial principal sum.
Plan Your EMIs to Optimize Your Marriage Loan Eligibility
For Marriage Loans, borrowers should select the repayment duration and Equated Monthly Installments (EMIs) that work best for them. It is crucial to choose the quantity and frequency of EMIs very carefully. Lenders make sure the total EMI payments, which include all of the borrower’s loans, don’t exceed 60% to 70% of the borrower’s monthly income before approving a Personal Loan application. If it does, the lender will probably deny your request for a Marriage Loan.
Look into the Foreclosure Fees
Before applying for the loan, check all potential fees and penalties. Processing fees, late payment/default penalties, prepayment penalties, etc., are a few examples.
The factors below apply to all lenders, even if the particular Marriage Loan eligibility requirements may vary from case to case.
A person needs to be at least 22 years of age to qualify for a Marriage Loan. Nevertheless, some lenders set the bar at a 25-year minimum age requirement.
Lenders require a minimum net monthly salary of ₹20,000 to be qualified for a Marriage Loan. However, this sum might change based on your credit history and the loan amount, and it could even go up to ₹25,000. Marriage Loans are accessible to salaried, independent contractors and licensed professionals of all work types.
Salaried professionals can qualify for Marriage Loans. In consideration for Marriage Loans, salaried individuals must have a minimum of one year’s employment and must be in their current job for at least two months.
Marriage Loans are unsecured loans. Hence, lenders want a CIBIL score of 750 or above from applicants. They have a strict screening procedure in place, and even a CIBIL score of 700+ may not be accepted.
Maximum Loan Amount
The highest amount you may borrow under a Marriage Loan differs between loans. However, the maximum number for a Marriage Loan is usually limited to ₹25 lakh, and ₹30 lakh with Poonawalla Fincorp.
To conclude, numerous banks and non-banking financial institutions provide loans designed for marriages to help couples procure the financial resources needed for weddings. You must meet the lender’s requirements for Marriage Loan eligibility if you want to be eligible for the loan.