May 21, 2024

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Things to Know before You Avail a Wedding Loan to Manage Your Expenses!

Wedding Loan

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A wedding is a grand occasion, and in India, it is not uncommon to see several lakhs being spent behind one. The expenses include everything from hiring decorators, caterers, photographers, and event planners to booking the venue for the wedding.

Many people prefer to opt for a wedding loan to finance these expenses rather than dip into their hard-earned savings. It is also a smart move since the loan can be comfortably paid off in monthly instalments rather than covering such a huge expense at one go.

Now, there are certain things that you should know about this loan. Read on to learn about 5 important factors that you should be aware of before applying for a wedding loan:

1. Plan your budget before applying for a wedding loan

While some lenders may offer a personal loan of Rs 50,000, others might even offer up to Rs 25 lakh depending on the borrower’s personal loan eligibility. But this does not mean that you should always go for the maximum loan amount. Ideally, aim for an amount that is affordable and can be paid off conveniently. Applying for an amount that is slightly out of your budget can cause repayment problems in the future.

2. There are no restrictions on usage of the loan amount

An education loan can only be used for academic expenses and a home loan can only be used for buying a property. However, unlike these loans, a personal loan does not put any restrictions on the usage of the loan amount. You can use the amount for any personal expense.

3. Make sure to get a suitable repayment tenure

It is very important to choose a tenure that you find convenient to pay off the monthly instalments of the wedding loan. Most lenders offer a tenure of up to 5 years for a personal loan. Now, you can choose the entire tenure or pay off the loan in a shorter period based on your budget.

4. Focus on the interest rate offered by the lender

The interest rate of a loan can significantly affect your personal loan EMI payments. This is why it is so important to focus on the personal loan interest rate being offered. To get a better interest rate, it is important to maintain a decent credit score, have a good monthly income, and have a steady employment record.

5. Avoid letting the loan’s EMIs cross 40% of your monthly income

While you may feel that a high loan amount is affordable, it is necessary to leave room for the rest of your expenses. This is why it is advisable to keep the loan’s EMIs under 40% of your monthly income. This is to ensure that you do not fall short of other financial obligations.

So, before applying for a personal loan to cover your wedding expenses, keep the above-mentionedpointers in mind. This will help in not just getting adequate coverage for your expenses but alsoa wedding loan that is affordable.