Marriage Loan

A marriage loan also known as a wedding loan is an unsecured personal loan that can be availed to cover the expenses of a marriage ceremony such as venue booking, guest accommodation, catering, etc. Marriage Loans are offered by almost all leading banks and NBFCs (Non-Banking Financial Companies) in India. A marriage loan can help you fund expenses relating to your own wedding or that of your loved ones. Just like most personal loans, a wedding loan can usually be repaid over a flexible tenure ranging between 12 to 60 months and do not require borrowers to provide collateral or security.

Eligibility Criteria for a Marriage Loan

Most banks and NBFCs offer marriage loans to both salaried as well as self-employed individuals/professionals. The eligibility criteria for these personal loans may vary slightly from provider to provider and based on the applicant category that a person belongs to. However, usually the following key criteria need to be met when you apply for a wedding loan:

Note: The marriage loan eligibility criteria mentioned above is generic in nature and the eligibility criteria may vary from one lender to another. Lenders may also require applicants to fulfill additional eligibility criteria on a case by case basis.

How do Marriage Loans Work?

Marriage loans are unsecured loans that typically come with a repayment tenure ranging between 12 to 60 months. EMI payouts are higher, if a shorter repayment tenure is chosen, while a longer repayment tenure results in lower EMI payouts. Some key features of a marriage loan are given below:

• Requires no collateral/security: No collateral or security is needed to avail a marriage loan. You can avail this unsecured loan by simply meeting the eligibility criteria and having a good credit profile (credit history), which depends on your credit score, repayment history, income, etc.
• Flexible repayment tenure: Marriage loans usually come with a flexible repayment tenure ranging between 12 to 60 months.
• Flexible loan amount: You can avail a wedding loan ranging between Rs. 10,000 to Rs. 40 lakh. However, the eligible loan amount that an individual can avail depends upon his/her repayment history, age, profession, monthly income, employer reputation, etc.
• Minimal documentation: You can apply for a wedding loan both online and offline with minimal documentation. Some key documents that lenders usually ask for include identity proof, address proof and income proof.
• Quick disbursal: Once your loan application is approved, your marriage loan can be disbursed within a few hours. In case you are eligible to avail a pre-approved loan offer, the turnaround time can be as short as a few minutes.

Marriage Loan Interest Rates

Marriage loan interest rates vary from one lender to another. These personal loan interest rates also depend upon the person’s individual applicant profile including his/her credit score, nature of employment, quantum of loan and tenure desired, etc.

Marriage loan interest rates of some leading banks and NBFCs in India are given below:

Factors Affecting Marriage Loan Interest Rate

• Credit Score: It is the 3-digit numeric summary of your credit history and ranges between 300 to 900. A good credit score indicates a higher credit-worthiness and better repayment capacity and thus, may help you avail a marriage loan on better terms and conditions such as a lower rate of interest.
• Repayment Capacity: Borrowers may be charged a higher rate of interest on marriage loans if they have high existing debt because a higher fixed obligation usually increases the risk of default for the lender.
• Loan Amount: Often, higher loan amounts lead to the applicant being charged a higher rate of interest. The reason behind this is that, higher loan amounts usually lead to higher EMI payouts which increases the risk of default for the lender.
• Loan Tenure: Longer loan tenures often come with higher interest rates and vice versa.

Tips to Get a Low Marriage Loan Interest Rate

Here are a few tips that could help you avail a lower rate of interest on your marriage loan:

• Build and maintain a healthy credit profile and a high credit score
• Apply for marriage loan with a lender with whom you have a prior relationship
• Minimize your outstanding debt or maintain a low credit utilization ratio
• Maintain a stable employment history
• Choose a secured personal loan such as loan against shares, KVP, NSC, LIC, etc.

Ways to Decrease Total Interest Payout

The following are some tips that could help you decrease the total interest payout on your loan:

• Opt for a shorter tenure – It would lead to higher EMI payouts but will help decrease the overall interest payout on the loan
• Opt for a lesser loan amount – Lower loan principal amount leads to lower total interest payout
• Part pre-payment/foreclosure – Helps decrease the loan principal which results in lower interest payout over the loan tenure

Reducing Balance vs. Flat Interest Rate Method

At present, majority of the lenders make use of the reducing balance method to compute the interest payable on marriage loans. However, the loan agreement provided to the borrower states the exact method used by the lender.

EMI Payment Comparison of Reducing Balance vs. Flat Rate 

The following table gives a comparison between the monthly EMI payouts with reducing balance and flat rate methods of interest calculation for varying loan amounts, tenures and interest rates:

Interest savings shown above represent the difference between the total interest payout of the loan when the reducing balance method is used to calculate interest payable on marriage loans versus when the flat rate method is used.

Documents Required for Marriage Loan

Some common documents needed to avail a marriage loan are given below:

• Identity Proof: PAN Card/ Aadhaar Card/ Voter’s ID/ Driving License/ Passport
• Address Proof: Aadhaar Card/ Bank Account Statement/ Passport/ Lease/ Property purchase Agreement/ Driving License/ Utility Bill (not more than 3 months old)
• Income Proof:
  • For Salaried Individuals: Salary Slips/ Form 16/ Bank Account Statement
  • For Self Employed: Previous Year ITR/Bank Account Statement/ P&L Statement and Balance Sheet

• Business Proof: Certificate of Practice/ GST Registration and Filing Documents/ Partnership Deed/ Shop Act License/ MOA & AOA

Note: This is not an exhaustive list. Documents required may vary from one lender to another.

How to Calculate your Marriage Loan EMI

Paisabazaar.com’s Personal Loan EMI Calculator lets you know the monthly pay out that you would be making to pay off your loan by simply entering the wedding loan amount, interest rate and tenure. This helps in better management of finances and lets you choose the most appropriate loan option for yourself.

The table below gives a sample of EMI calculations for varying loan amounts, interest rates and tenures:

Why Should I Apply for Marriage Loan at Paisabazaar.com?

There are several advantages of applying for a wedding loan through Paisabazaar. Some of them are given below:

• Multiple lenders on a single platform: With Paisabazaar, you can access various personal loan offers from multiple lenders on a single platform without physically visiting the branch offices/ websites of individual lenders.
• Know the chances of your loan approval: com makes use of a proprietary algorithm known as SmartMatch, which lists prospective lenders as per the chances of approval for your marriage loan application.
• Know the eligible loan amount: The Paisabazaar platform also lets you check the loan amount that you are eligible to avail on your marriage loan.
• Check EMIs payable: With Paisabazaar’s Personal Loan EMI Calculator, you can know the EMI payable on your marriage loan even before you apply for it. This helps in better financial planning and management of finances.
• Avail a personal loan online: The completely online platform allows you apply for a wedding loan online from the comfort of your home/ office and enables you to save both time and money.
• Get in-principle e-approval instantly: When you apply for a marriage loan online through Paisabazaar.com, you can get in-principle e-approval for your marriage loan application in just a few seconds.
• Complete transparency and privacy: com is ISO 27001-2013 certified for Information Security Management System. Thus, all your personal details are kept completely private and secure.

How to Apply for Marriage Loan at Paisabazaar.com?

You can apply for a marriage loan online at Paisabazaar.com by visiting the Paisabazaar website and clicking  on the “Personal Loan” button on the home page and following the steps given below:

Step 1. Fill in your personal details including your occupation type, monthly income, current city, mobile number along with the required loan amount and click on ‘Proceed’.

Step 2. To find the most suitable personal loan offer, fill in information such as your company’s name, work experience, PAN and current loan EMI amount (if any).

Step 3. You will get a list of marriage loan offers from various lenders (banks and NBFCs) listed as per the chances of approval. Choose the loan offer that suits your requirements and complete and submit your marriage loan application online.

Step 4. You will get an instant conditional e-Approval from the lender. The Paisabazaar team will also guide you through the documentation process needed for loan processing and disbursal.

How to Apply for Marriage Loan using Paisabazaar App?

To apply for a marriage loan through the Paisabazaar app, you need to first install the app on your phone. Once you have logged into your Paisabazaar account, you can follow the steps given below and apply for a wedding loan using the Paisabazaar App:

Step 1. On the dashboard, click on the ‘Personal Loan’ tab.

Step 2. Fill in personal details including the nature of your employment, net monthly income, the desired loan amount and the residing city. Agree to the terms and conditions and click on ‘Proceed’.

Step 3. Fill in additional details like the name of your bank, work experience and click on ‘Proceed’.

Step 4. You will receive wedding loan offers from several lenders listed as per the chances of approval.

Step 5. Choose the offer that suits your need.

Step 6. Fill in bank-specific additional details that may be needed to submit your loan application online.

Loan Verification Process

The verification process for a marriage loan involves the following steps:

1. Once you have applied for a personal loan on Paisabazaar.com/ Paisabazaar App, your application is forwarded to the chosen lender by Paisabazaar.
2. Following this, you will receive a call from the lender’s representative to verify application details and to schedule  pickup of the necessary documents required for your loan application.
3. Once the lender successfully verifies the documents, your marriage loan application is approved.
4. Once you sign the loan agreement, the loan amount is disbursed to your account.

How is a Wedding Loan Disbursed?

Once your marriage loan application is approved and the loan has been sanctioned, disbursal can take place in any of the following ways:

Option 1: Direct fund transfer to a current/ savings bank account specified by the applicant

Option 2: A draft or an account payee cheque sent to the applicant’s mailing address by post

Direct transfer of funds to a bank account is usually preferred as it takes less time and there is no risk of the cheque or draft getting lost in transit by post.

Factors Affecting Marriagel Loan Disbursal Limits

Some key factors affecting the disbursal limits of marriage loans are given below:

• Applicant’s income: The disbursal amount may increase if your have a higher level of income
• Current EMI payable: Generally, higher EMI payouts lead to a decrease in the disbursal amount
• Number of dependents: The disbursal amount may decrease in case you have a higher number of dependents

Note: This is not an exhaustive list of factors impacting the disbursal limits of wedding loans and there are various other factors that influence the disbursal decision made by lenders.

What are the Different Ways to Pay Marriage Loan EMI?

You can repay your marriage loan in easy EMIs using any of the following means given below:

• Autopay: You can set up autopay for your EMI payments using internet banking
• Standing Instructions: You can make use of NACH mandate to set up standing instructions
• Online Transfer: You can also pay your EMIs online using RTGS, NEFT, IMPS payments
• Draft/ Cheque: Drafts or post-dated cheques can also be used to pay your marriage loan EMIs

However, the various EMI payment options mentioned above may or may not be available with all the lenders.

How to Reduce Your Monthly EMI?

If you are finding it difficult to pay your monthly EMIs, you can try and negotiate a lower EMI by extending your repayment tenure. However, the increased tenure could result in a higher interest payout over the loan tenure.

Alternatively, you can also opt for a balance transfer. This could help you transfer the principal outstanding of your current loan to a new lender at a lower rate of interest, which will help decrease the monthly EMI payouts.

Some Must Know Terms Related to Marriage Loan

Given below are a few key terms related to marriage loans that you must know:

• Balance Transfer: The process of transferring the outstanding principal of an existing loan to a new lender offering better terms and conditions such as a lower rate of interest is known as balance transfer. It may help you avail benefits such as a lower interest payout or a longer repayment tenure, etc.
• Top-up Loan: Borrowers can avail a top-up on their existing wedding loan to meet additional financial requirements. However, top-up loans are available only to select customers and the interest rate and other loan terms are usually the same as their existing marriage loan.
• EMI: EMIs are the equated monthly installments that a borrower must pay over the loan tenure to pay off the principal amount borrowed along with the interest accrued.
• Partial-Prepayment: If you pay an amount in excess of the monthly EMI payout, the extra amount paid is considered as a partial-prepayment. It leads to a decrease in the outstanding loan principal amount and reduces the total interest payout of the loan. However, the borrower may be required to pay certain prepayment charges along with the related applicable taxes.

Charges and Fees Related to Marriage Loan

Some additional fees and charges that may be applicable on a marriage loan apart from interest charges are given below:

• Processing Fees: It covers the administrative charges involved in the disbursement of a personal loan. Usually, the processing fees can be up to 6% of the loan amount sanctioned.
• Late Payment Charges: It is usually a fixed charge that you will have to pay along with the due amount when you are late in making your EMI payments.
• Cheque Bounce Charges: If you miss an EMI payment because the account linked to the post-dated cheque has been closed or is low on funds, you will have to pay cheque bounce charges. It is usually applied as a fixed charge of around Rs. 500.
• Foreclosure/Prepayment Charges: When you pay an amount in excess of the actual EMI amount, it is known as prepayment. Foreclosure involves paying off the entire outstanding loan amount before the end of the repayment tenure. In case of this complete prepayment, lenders usually levy a fee known as foreclosure charges. These usually range between nil to 6% of the principal amount prepaid plus applicable taxes.

FAQs

Q1. What is the difference between a personal loan and a marriage loan?

Personal loans come with flexible end-usage and can be availed to meet personal expenses including debt-consolidation, medical expenses, education, home renovation, etc. Whereas, marriage loans are personal loans specifically designed to deal with wedding related expenses including catering, guest accommodation, venue booking, etc.

Q2. What all expenses can be covered under a marriage loan?

You can avail a wedding loan to deal with all sorts of nuptial expenses including purchase of clothes and jewellery, catering, venue booking, etc. However, expenses related to dowry and those related to second marriage (except for widow remarriage) are usually excluded from the purview of wedding loans.

Q3. What is the best credit score to get a marriage loan?

Credit score is a 3-digit numeric summary of your credit history and ranges between 300 and 900. A score closer to 900 (such as a CIBIL score of 750 or above) is considered to be a good score and increases your chances of securing a wedding loan. It may also help you avail better terms such as a lower rate of interest or a longer repayment tenure on your marriage loan.

Q4. How is interest payable on a marriage loan determined?

Marriage loan interest rates may vary from time to time and with different lenders. Interest payable by a particular applicant also depends upon the person’s individual applicant profile including his/her credit score, nature of employment, age, loan amount and tenure desired, etc.

Q5. What is the minimum and maximum loan amount that I can avail on a marriage loan?

Lenders usually offer wedding loans ranging between Rs. 10,000 to Rs. 40 lakh. However, the loan amount that an applicant can avail depends upon various factors including the person’s credit profile, income, existing liabilities, etc.

Q6. Is it possible to foreclose or prepay wedding loans?

Yes, you can foreclose/ prepay your marriage loan and save on the interest component. However, lenders can charge a prepayment fee of up to 6% of the outstanding loan principal amount in case you decide to repay your loan before the end of its tenure.

Q7. What are the common documents required to avail a loan for a wedding?

The common documents you usually require to secure a marriage loan are proof of identity, proof of address and proof of income. However, the exact documents required may vary from one lender to another.

Q8. What are the different ways to apply for a wedding loan?

You can apply for a wedding loan via any of the following means given below:

• Online: You can apply for a marriage loan online through the lender’s website or using Paisabazaar.com
• Offline: You can visit the prospective lender’s branch office and submit a duly filled out loan application form along with the relevant documents to apply for a wedding loan.

Q9. Who can avail a wedding loan?

Both salaried as well as self-employed individuals can avail a wedding loan to fund the expenses of their own marriage or that of their loved ones, provided they meet the eligibility criteria specified by the lender.

Q10. Can I avail a top-up on my marriage loan?

Yes, some lenders do offer top-up loans to borrowers over and above their existing marriage loan to meet additional financial requirements. However the eligibility for such top-up wedding loans is decided on a case by case basis.