Celebrating a child’s wedding is one of the most important occasions in any parent’s life – and in India, this most joyous of occasions involve expenses on an equally grand scale. Few people have ready cash to fund expenditure of such a magnitude – which is why many parents and couples look for a suitable ‘marriage loan’ that can help them tide over this huge cash outflow.
While there is no specific product known as a marriage loan, you can take a personal loan to cover the costs of organising the wedding. A personal loan can be used for any purpose – whether a wedding celebration or an expensive vacation or even medical emergencies. You do not need to specify the end-use of the loan amount. Most banks and NBFCs offer personal loans, though the only disadvantage of a personal loan is that it has a higher than average interest rate.
How to apply for a ‘marriage loan’
It is easy to apply for a personal loan to help you cover your child’s wedding expenses. The loan amount can range from a few thousands to a few lakhs depending on your ability to repay. You can check your eligibility online at several bank/lender websites before applying to check if you qualify for a loan. You can apply for the loan online or visit a branch for details.
There is not much documentation as the loan can be used for any purpose and could include ID proof, address proof, bank statements and salary slips. The documentation required will vary with each bank and depends on your profession, income and loan requirement.
Interest rate and tenure on a personal loan
The interest rate charged depends on a number of factors including income, profession, credit score, relationship with the bank among others. In general, the interest rate on personal loans can range from 15%-20%. The loan period typically ranges from 1-5 years.
Advantages of a personal loan
There are two attractive features of a personal loan:
• Complete flexibility of end-use. There are no restrictions on how you should spend the loan amount. You can use the entire loan amount to cover the wedding expenses ranging from clothes and jewelry to hiring the hall, caterers and any other expenses. You have complete freedom to use the money from the ‘marriage loan’ for any purpose you want - even it is not related to marriage expenses.
• Lack of collateral. A personal loan is an ‘unsecured loan’, meaning you are not required to provide any security to the lender in the form of cash, shares or any other assets. This might make it more attractive to some customers who may not be able to raise the collateral required.