Marriage is one of the most important events in one’s life which everyone wants to make memorable. One has to generally borrow at the occasion of marriage in the family. With increased emphasis of the banks on retail lending and aggressive stance of the Non Banking Finance Companies (NBFC) the loans for the purpose of marriage are available in plenty and easily too. Let us discuss the various aspect of marriage loan.
Why one takes marriage loan
In India weddings is a major industry providing employment for many people from catering to lodging, from photo shoots to honeymoon. It is equally expensive and the budgets ranges from few lakhs for an average family to few crores for rich in India. How so meticulously you budget for the expenses for marriage in the family, the budget overshoots generally and thus need for borrowing from available sources arises. Majority of the families save for this big event. It is one of the major financial goal under the sphere of financial planning, in addition to child education, buying a house and retirement. In case the expenses are to be borne by the person himself who is getting married he has to invariably borrow for this purpose as he would not have been able to save that much.
For whom the loan can be taken
The marriage loan can generally be taken for meeting various marriage expenses of the applicant, siblings and children of the applicant. Unlike personal loans where the lenders generally do not allow anyone to be added as co applicants, some of the lenders like the Corporation banks allow upto two co applicants to enhance your eligibility under their marriage loan schemes. Some lenders like co operative banks allow the bride and groom to join as as joint applicant to get a higher marriage loans for them.
Generally the marriage loans would cover all the expenses connected with the marriage. These expenses include the expense of catering, jewellery, cloths, lodging of the guest, conveyance. Some of the lenders even lend for honeymoon trip as well under the marriage loans.
Who provide the marriage loans
There are many lenders active in providing the marriage loan under various names. Here are some of the scheme of marriage loans.
Corporation Bank provides marriage loan under the name of Corp Shubha Vivah. Under this scheme the bank provides loan for applicants between 21-65 years of age. Even Non Resident Indians (NRI) or Persons of Indian Origin (PIO) can also avail loan under this scheme. The minimum amount of marriage loan under this scheme has to be Rs. one lakh. The maximum amount of marriage loan available ranges from Rs. 2 lakh to Rs. 10 lakhs depending on where the branch is situated. It is lowest for rural area and highest for branches
in Metro Cities. It provides marriage loans repayable between 5 to 7 years. Corporation bank does not charge any prepayment penalty in case the loan is repaid before its tenure. You need to provide some tangible asset as security to the lender like mortgage of property or any financial assets like National Saving certificates, Kisan Viksh Patra, Units of Mutual Funds, Listed shares, life insurance policies. It provides a marriage loan for a small amount like one lakh without insisting for any security to salaried people provided their salary account is with the Corporation bank.
Tata Capital an NBFC provides wedding loans under the umbrella of personal loan without insisting for any tangible security from the borrower. It uses online platform for faster processing of the loans. The interest charge range between 11.49% to 19% annually depending on the profile of the borrower. The rate of interest is lower for the salaried people with good credit score.
Who can apply for the marriage loans
Though some of the lenders have tailor made loan schemes for meeting expenses related with marriage but almost all the lenders provide personal loan to meet any expenditure which is legitimate including marriage expenses. So the amount of money borrowed as personal loan can legitimately be used for the purpose of meeting your marriage expenses. For being eligible to apply for marriage loan either as r marriage loan propeor as a personal loan, you should have good credit history and credit score. This is basic prerequisite. A CIBIL score of 750 and above is considered very satisfactory by the lenders and is your primary eligibility criteria provided your other documents are in order and your income is sufficient enough for the requisite amount of loan. Salaried and professionally qualified person, as a category, are preferred borrowers as compared to other category of borrowers.
The documents requirement and income criteria for wedding loans are the same as those applicable for personal loans. So depending on the lender, you will have to provide the basic KYC (Know your customer) documents to establish your identity and residential address in case you do not have any existing relationship with the lender. For these purpose documents like PAN card, Voter Card, Aadhaar card, driving licence, telephone bill, electricity bills, rental agreement, ownership papers of the property owned by you etc are considered satisfactory. Likewise establishing your repayment capability, the salaried have to submit the form no. 16 with bank statements but self employed have to submit elaborate documents like profit and loss account with balance sheet and copies of ITR filed and trade registration certificates etc.