In order to meet the financial adequacy required for the marriage, various banks and non-banking financial companies offer different types of loans especially customised for marriages.
New Delhi: Getting married is one of the nicest things for a thriving relationship as it enables both the partners to learn a number of shared responsibilities. It might not be necessary that couples should be having adequate money, at the time of marriage, to make it to their dream wedding happen. In order to meet the financial adequacy required for the marriage, various banks and non-banking financial companies offer different types of loans especially customised for marriages.
Nowadays, couples are relatively more enthusiastic on spending higher money to get their dream marriage plan on the table. Events such as bachelor party, pre-wedding musical celebration, pre-wedding vacation with friends, glamorous reception in five-star hotel, destination wedding, celebrity performance, customised goody bags for guests, premium liquor and catering arrangements, star photographers, wedding planners, etc, are getting popular amid the millennials.
Here are 5 key things you should know before you take a loan for your dream marriage
What are marriage loans
Marriage loans are largely similar to personal loans. You can either avail a personal loan and mention the reason for loan as ‘wedding expenses’ or opt for a customised wedding loan. Many banks, NBFCs offer marriage loans with different specifications.
Interest rates and processing fees
All the banks and NBFCs levy high rates of interest on marriage loans, as these are a type of unsecured loans taken to cover various wedding expenses. Normally, the interest rates applicable on marriage loans starts from 11 per cent which can escalate up to 24-25 per cent, depending on the credit score, repayment history, sources of earning, creditworthiness, etc,. Other than this, a processing fees, ranging between 1 per cent and 3 per cent, is applicable (excluding taxes) on marriage loans.
Repayment and EMIs
Individuals should choose the best suited repayment period and equated monthly installments (EMIs) on marriage loans. The decision on quantum and frequency of EMIs should be taken extremely carefully. Individuals should opt for amount which they can easily repay. Evaluating the brief terms and conditions of marriage loans across the popular banks and financial services companies can lead to better and informed decisions.
Joint loan facility
Banks and financial services companies also offer joint loan facilities for marriages in which the burden of marriage loan repayment is divided between the partners. Notably, with the shared dependability, joint loan affects the credit profile of both the partners and with this, the partners are required to proactively manage the EMIs on repayment deadlines.
However, banks may grant higher amount loan depending upon the earning capability of both partners. Post availing a joint loan facility, partners have to make sure timely repayments as missed repayments will hamper the respective credit profiles which may lead to difficulty in taking further loans such as vehicle loan, home loan, etc,.
Most of the banks and NBFCs levy prepayment charges on marriage loans. For whatsoever the reason maybe, if an individual wants to prepay the loan amount before the completion of lock-in period, banks may charge about 5 per cent as the prepayment penalty as a diversion from scheduled receivables and payables disrupts banking systems. Generally there is a lock-in period of six months to one year.