scorecardresearchWedding season is back! 5 things to keep in mind before applying for marriage loan

Wedding season is back! 5 things to keep in mind before applying for marriage loan

Updated: 30 Nov 2022, 12:53 PM IST
TL;DR.
Child’s marriage is a dream for many parents, but funds for the marriage is one of the most important problems parents face. In this article, we will explore key things to remember while using a loan as a source of funds in your child’s marriage.
A marriage loan is a type of personal loan that can be availed to meet your child’s or your wedding expenses.

A marriage loan is a type of personal loan that can be availed to meet your child’s or your wedding expenses.

There are several ways of funding your child’s marriage as it can cost you a startup in India. The Indian wedding’s market is growing at the rate of 25-30% annually, it’s only because we can do anything to fund a big fat wedding in 5-6 days of the event. 25-30 lakhs spending on a wedding is said to be a cheap wedding in India. In such a competition, you must be looking for a way to sort your finances out.

Investing could be the best way to fund your child’s wedding, but if you haven’t done this yet and you do not want to touch your retirement corpus, marriage loan is one of the best options for the same. But, here are the few things that you must keep in your mind while applying for a marriage loan. Before jumping into the “things to remember” deep dive into the marriage loan.

READ MORE: Wedding season is here; What is wedding insurance policy and what’s in for you

What is a marriage loan?

A marriage loan is a type of personal loan that can be availed to meet your child’s or your wedding expenses. However, the loan amount usage is not exclusively related to wedding expenses like catering or event managers or etc. The loan amount can also be used for the bride of grooms related expenses on wedding, like dresses, gifts, jewellery, and any other things to list down.

Before looking forward to apply a loan for your child’s marriage, remember to look at:

Credit score

Keep checking your credit score, as if your credit score is lower than 750 points, you might not be able to get the loan amount that you are expecting to spend on the wedding, or you have to pay more interest than you are supposed to.

READ MORE: How to invest wisely for the wedding of your child? Here are 3 key steps

Previous EMIs

Plan your finances before applying for the marriage loan. Your EMI should not become a debt stress for you, so it is better you clear all your EMIs before applying for the new loan. It will be beneficial for your credit score as well. It is advisable to keep your debt less than 30% of your monthly income.

Foreclosure charges

When you pay the remaining principal amount of your loan at one go, i.e., before the tenure, the bank will charge you some fees, such a fee is known as foreclosure charges. Always have a look at such charges as in case if you want to prepay your loan, it should not be a burden for you.

READ MORE: Marriage Checklist: 7 checks you must do on your partner's financial habits

The best deal

Due to lack of awareness about the market, you apply for a loan in the bank that charges you high interest rates and miss out on the opportunity to take a loan from the banks that are charging less than your banker. It is always better to do your own research before taking any action.

Return filing

File your return timely so that your finances get an authentic pass out. It will help the banker to sanction your loan easily by looking at your income tax returns as evidence of your consistency.

Managing your finances is not a rocket science that you have to give a life to learn, it is just a basic concept of living a stable life. Above mentioned points are not only suitable for applying for a loan, but useful for your own financial stability.

Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com

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First Published: 30 Nov 2022, 12:53 PM IST