A typical Indian wedding can be a very costly affair. Each of the items that a family incurs can be from a few thousand rupees to several Lakhs. Most families have saved for years to arrange for these costs. Still, last-minute expenses can create troubles — this is where a Personal Loan for a wedding can help. However, before applying for an online Personal Loan, it is best to know the advantages and Disadvantages of choosing a Personal Loan.
What is a Personal Loan?
A personal loan covers a variety of costs, including venue, catering, clothing and decoration. The interest amount and loan amount in a Personal Loan are based on your credibility and the lender’s policies. Use this loan to pay for your expenses and pay it back to the lender in Equated Monthly Instalments (EMIs). The good part about these unsecured Personal Loans is that there is no collateral, security or down payment required for sanction.
Should You Use a Personal Loan to Cover Wedding Expenses?
Wedding expenses can sometimes go over your initial budget. In these cases, borrowing funds may be required. Here are a few benefits when deciding whether a Personal Loan is a good option to cover wedding costs:
Fixed EMIs: Since interest rates for a Personal Loan will be at a set rate, you will have fixed EMIs. This means you have better certainty on wedding expenses and can have better plan-making and budgeting decisions with a predictable budget that offers more certainty when paying it.
No Collateral Requirement: The unsecured nature of an online Personal Loan eliminates the need to pledge collateral. Such a facility removes the risk of losing your assets in the event of loan default.
Easy Access to Necessary Funds: Lenders for online loan applications generally process them quickly, providing you with access to funds at the earliest. It provides sufficient financial support for various wedding expenses on short notice.
Minimum Paperwork: Procuring an online Personal Loan is a simple process. It requires no branch visits or processes of extensive documentation. As a result, they can get processed promptly without paperwork.
Simple Application Process: The latest technology has made Personal Loans highly convenient. Most NBFCs now have websites and loan apps for applying, enabling you to have the process carried out from the ease of your own home.
Sufficient Loan Amount: A Personal Loan offers the utmost flexibility and freedom to fund wedding expenses. You are free to use the loan amount to meet your individual requirements without any strict constraints. It enables you to organise your wedding without hassle. For example, Hero FinCorp offers an enormous loan of up to Rs 5 Lakh to manage all wedding-related expenses.
No Effect on Your Savings: When you take a Personal Loan to finance your wedding expenses, you won’t need to use your savings account for the purpose. You can keep your savings safe for emergencies.
Personal Loan Interest Rate: The EMIs of a Personal Loan are manageable with an attractive interest rate.
Precautions While Budgeting a Wedding with a Personal Loan
Even though a Personal Loan comes without collateral requirements, you should be cautious if you are spending it on your wedding. Below are some crucial precautions to take:
Compare Interest Rates: As Personal Loans are not collateralised, they tend to have higher interest rates than secured loans. This leads to bigger monthly EMIs, putting unnecessary strain on your budget and disrupting financial management. Compare interest rates from different lending institutions, have a high credit score, and decrease the debt-to-income ratio to obtain the lowest possible interest rate.
Prevent Overspending: The convenient access to finances is likely to tempt overspending. Having the liberty to utilise the loan for any purpose tempts one to indulge in wasteful expenditures, resulting in avoidable outlays and making the budget go beyond the plan. Avoid emotional appeal and societal expectations to keep the wedding budget within limits.
Select the Tenure Carefully: A longer loan tenure will decrease your EMI burden. But it will make your loan costlier at the end of the term. Use a Personal Loan EMI calculator and choose the lowest possible tenure with reasonable instalments. It will raise your EMI but save on the loan cost and get you debt-free earlier.
Save Your Credit Score: Failing to pay EMI can substantially hurt your credit score, decreasing your creditworthiness for subsequent loans. As a result, you qualify for smaller loan amounts, that too, at higher interest rates. Pay your Personal Loan EMIs on time to build your credit score and improve your chances of getting bigger loans in the future.
Steps to Plan Your Wedding with a Personal Loan
An online Personal Loan allows you to handle your wedding expenses without financial tension or pressure. Just follow these simple steps to arrange a hassle-free and smooth wedding with a Persona Loan:
Set a Budget: Set a budget and stick to it while organising a wedding. With this approach, you can manage your finances while following the wedding rituals. Write down all the costs you intend to incur with the loan and begin planning the budget. With a clear plan in place, you can handle the expenses involved and prevent wastage in various areas.
Compare Loan Plans: While applying for an online Personal Loan, compare the loan plans offered to you on the interest rates, repayment modes, tenures, and fees. Choose a plan that is appropriate for your financial situation and repayment capacity. Also, ask about the prepayment facilities, which save the interest payments and make you debt-free sooner.
Plan in Advance: You can take the loan in advance of the wedding date, as it spares you from last-minute panic and keeps you financially prepared. Moreover, you get enough time to compare the available loan options and obtain comfortable financing for your dream wedding. Always keep your monthly income and budget in mind to make sure the EMIs suit your needs and budget.
An online Personal Loan is a convenient option to finance wedding costs. But be aware of its benefits and borrow responsibly to fulfil your needs without any burden. You can get a Personal Loan of Rs 5 Lakh from Hero FinCorp and enjoy your big day without straining your finances.
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