A wedding loan is one of the most popular financial tools among Indian youths. As the new age mentality shifts towards the ‘use now, pay later’ concept, wedding loans are witnessing a steady rise. With increased ease of availing a loan, simplified eligibility criteria, instant processing and better repayment capability, financing has become the new way of living. Though it is very easy to get an instant loan for managing your wedding expenses, there are certain things that you must consider before applying for a wedding loan. Keep your eyes open and mind alert to avoid falling into a debt trap.
8 Things to Consider Before Applying for a Wedding Loan
- Are you sure you need the loan?
A personal loan for your wedding expenses is a long time commitment. The EMIs that you will be paying will impact your budget for months. Considering your family is just getting bigger you might want to think on that twice. Also, before applying for a personal loan, discuss it with your partner as financial transparency is very important for a fruitful partnership. You might also consider borrowing from friends or family.
- Make sure you are not over-borrowing
Once you have carefully analysed the first point and decided to go on with the loan, you must be meticulous while deciding on the loan amount. It is very easy to get carried away when you are applying for an instant loan for your wedding. The jittery wedding thrills combined with the dreamy desires can often lead to over borrowing, especially when you are eligible for higher loan amounts. List out the essentials and make a budget before you apply for a loan.
- Check out your EMI
Before applying for the loan, you must make sure that the loan EMI is affordable for you. Use an EMI calculator on the online loan app or visit your lender’s website. By adjusting the loan amount and tenure you can easily check the EMI and the interest amount that you would be paying on the principal. Make sure to strike a balance between your affordability and your necessity. Ideally, your EMI should not go over 10% of your monthly income. Also, make sure to calculate your monthly obligations and monthly expenses.
- Find the best interest rate
When you apply for a loan, it is very important to make sure that you get the best possible interest rate. There are many factors that can impact your interest rate. Your credit score, your employment status, your income stability, and several other parameters affect your interest rate. Applying for an instant cash loan on a loan app might get you a better deal on the interest rate. Compare the loan offers from multiple lenders, negotiate on your terms and go for the one that offers you the best deal.
- Find the lowest possible loan processing fee
When you apply for a loan, you need to pay certain fees associated with your loan. For example, the lender may levy a loan application fee or processing fee. Make sure you tap the market and check the fees levied by different lenders. If you have an existing relationship with a particular lender and you have been very regular with your payments then you might negotiate with the lender to waive off the fee.
- Make right calculations regarding the loan tenure
With a loan, it is very important that you choose the correct loan duration. If you choose short loan duration, you will end up with very high EMI that could disrupt your monthly budget. And since you are applying for a wedding loan, make sure to note that after the wedding your monthly expenses are bound to rise. If you choose extended loan duration then your EMI will be so low but you will be paying much more to your lender on interest. A loan app allows you to see your options with different loan duration so that you choose the correct duration.
- Have you chosen the correct lender?
There are a number of lenders in the market and it might be difficult to choose the correct one when your wedding is right in the next row in the calendar. For a wedding loan, it is recommended to choose an app based lender because they bring many advantages to the table. The speedy process, instant disbursement and online customer service offered by these loan apps really makes all the difference. In addition to that, you might also get the loan at a lower interest rate because the operational costs of these online loan companies are much lesser than that of the traditional brick and mortar financing institutions.
- Do you have all your loan documentation ready?
With the loan app, the overall process of loan application is much faster and way simpler. However, you need to submit the correct details for the AI to verify your application and approve your loan. Make sure you furnish all the necessary documents in the correct format and be diligent while filling up the form. With an online loan app there are no piles of paperwork but you need to be very careful with the details.
Finally, it is very important to understand your financial standings. Look at your long term goals and understand the obligation that you are getting into. So, if there is a plan for job switch or higher education in the cards, then make sure to have a proper repayment plan in place. A personal loan for your wedding is meant to ease your financial burden and when you use it in the right way it can help you get the best experience on your big day!