Marriage is an important stage in life. This requires financial planning. Planning your wedding helps you arrange the necessary funds. It’s not uncommon for people to go over their wedding budget. A personal loan can help you overcome a problem like this.
Here’s how a personal loan can come to your rescue when you need money for your wedding.
Quick availability of funds
A personal loan is preferred because of the ease of access to funds. It’s the type of loan that can be processed in minutes, and you don’t have to go through a tedious application process.
Adhil Shetty, CEO of Bankbazaar.com, says, “You can apply for a personal loan online. If you are pre-approved, you can get the loan within a day. Several lenders may have created pre-approved offers for you based on your income and credit score. You can go online to check these offers, compare them and use them paperless.
No restrictions on the use of cash
When you take out a home loan or a car loan, the loan check is given directly to the seller of the property or the car dealership. On the other hand, when you apply for a personal loan, the payment is credited directly to your bank account. You are free to use the funds in any way. However, lenders generally caution against using the money for speculative activities such as stock market investments. But for weddings, you can use the funds however you wish, whether it’s paying for the caterer, the event management team, or the venue. There are no restrictions on how you spend the personal loan money for your wedding.
Flexibility to choose repayment term
When applying for a personal loan, you can choose the repayment term according to your repayment capacity and your financial comfort. Usually, banks allow a repayment term of up to 60 months on a personal loan, but some NBFCs can go up to 84 months. You can choose the appropriate repayment term depending on your other financial obligations. Keep the term as short as possible to minimize interest charges.
Personal Loan vs Unsecured Wedding Specific Loan
An unsecured marriage/marriage loan and a personal loan are generally the same loan instruments with different names. Having a wedding loan as a separate lending instrument helps lenders provide product-specific seasonal offers to attract customers. “There are no restrictions on how you use the loan amount you receive under a wedding loan which is similar to a personal loan. Interest and fees on wedding loans and personal loans can vary depending on the lender’s offer, so you should compare all available options before applying for the loan,” adds Shetty.
Advice for personal loan borrowers
Check your credit score, repayment capacity, income stability, etc., before applying for a personal loan. There are many variations of personal loans on the market, so you need to compare them to find the one that suits your needs in terms of term, interest rate, fees and loan amount offered. Below is a table that gives you an idea of how much EMI you will pay when you take out a loan of Rs 3 lakh for three years at different interest rates.
Note: data for reference only. The table consists of the lowest interest on personal loans by selected banks, regardless of the loan amount. Data collected from the respective bank’s website as of 08 Jun 2022. EMI is calculated based on the interest rate mentioned in the table for the Rs 3 Lac loan with a term of 3 years (the processing fee and others are assumed to be zero for the calculation of the EMI); The interest and charges mentioned in the table are indicative and may vary depending on the general conditions of the bank. ^^For government employees and defense personnel; *for doctors
Finally, a tip is that you should consider all the pros and cons when applying for a personal loan, including interest rates, term, and repayments. A personal loan can be used as an emergency borrowing tool to bridge a financial shortfall. Timely repayment and financial discipline are essential when considering a personal loan.