Marriage is an important social institution and planning something as significant as a wedding requires perfection to the T in every minute detail – be it choosing the wedding venue, sangeet venue, jewellery, wedding trousseau, caterers, photographers, decorations, flowers and other expenses. This special occasion requires not just flawless planning but the monetary resources to go with it. And at times, managing the finances may seem tougher than usual eliciting the need for wedding loan.
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Wedding Loan or a Wedding Loan Against Property: Which Is Better?
Lending institutions offer loans specifically for this purpose. You can apply for wedding loan, which is an unsecured loan, provides suitable funding solutions if you need smaller loan amounts of a few lakhs to meet the wedding costs. However, the interest rates are usually high with short repayment tenors which could make repayments difficult.
In case you require a larger volume of funds, secured loans like a loan against property enable you to address all the marriage requisites. You can obtain big-ticket loans against your property by pledging it as collateral at lower interest rates and longer tenors. Thus, borrowers can secure the necessary funds without straining their life savings or their present budget.
Benefits of a Loan Against Property for Wedding
A wedding loan against property covers the entire cost of marriage along with other related expenditures. This type of credit offers the following advantages:
- Lower interest rates – The interest rate in LAP for wedding is lower than a wedding loan fetching you an affordable loan.
- Loan to Value Ratio (LTV) – Loans against property for a wedding come with an LTV of 60% to 70%. This is the amount of money lenders are likely to sanction against the value of your pledged property ensuring high-value loans.
- Longer tenors – It can be availed for longer tenors of up to 20 years or more assuring you of smaller EMI pay-outs that do not burden the borrower.
- Minimal documentation and quick disbursal – With simple eligibility norms and minimal documentation conditions, processing a LAP application is easier with swift loan disbursals.
- Balance transfer facility – One can consider transferring their loan balance amount to another lender if they feel the current rate of interest offered to them is higher than the market rates.
- Top-up loan – If you have already obtained a property loan, applying for a top-up will allow you to meet other marriage-related needs. You can benefit immensely from an extra loan at the same interest rates and terms without the hassle of applying for fresh credit.
How to Avail of a Loan Against Property for Wedding
Lenders follow certain procedures before they approve wedding loan against property requests. They undertake due checks and verifications. These include ascertaining the ownership, value and condition of the mortgaged property. They also review the income and credit records of the borrower to establish his/her repayment capacity. If you understand the loan specifics and plan for it in advance, you can receive faster loan sanctions of the preferred sum. Lenders normally charge a processing fee between 0.5% to 1% of the loan amount before it goes through the loan against property application process.
Loan Against Property for Wedding Eligibility Criteria
Salaried and self-employed individuals must fulfil the following loan against property eligibility requirements when they seek a loan for marriage purposes:
- They should be Indian citizens residing in the country.
- Salaried applicants should be between 28 and 58 years old.
- Salary-drawing persons should be employed in a public or private organisation or an MNC with a work experience of over three years.
- Self-employed individuals should be in the age group of 25 to 70 years.
- They should have regular sources of income from their business enterprise with a continuity of at least five years.
- Borrowers must own the property they wish to mortgage in any of the cities the lender operates in.
- They should have an income between Rs. 25,000 to Rs. 35,000. This figure may vary depending on the applicant’s city of residence.
Important Considerations Before Applying for a Wedding Loan Against Property
There are several aspects that one must bear in mind before they apply for a wedding LAP. These are:
The Right Loan Amount
Review your budget and expenses carefully to get an accurate estimate of the required loan amount. Never overshoot the budget even if you are deemed eligible for a higher loan principal because, eventually, you need to repay the money. Therefore, apply for an appropriate sum that lets you foot the wedding bills and also repay the EMIs comfortably.
The rate of interest you pay on your loan can make it cheaper or more expensive. Securing loans at lower interest rates will keep the cost of credit within reasonable limits. If applicants have the right credit and income profile, they can obtain competitive rates. Hence, look for lenders who extend the lowest interest rates and ideal deals in the market. The interest rates offered on a Bajaj Housing Finance loan against property for wedding start from 10.10%* p.a. basis eligibility.
It becomes even easier to repay the marriage loan as per your financial situation and convenience if your lender offers flexible EMI repayment options.
If you wish to make part prepayments on your loan or repay the loan in full before tenor completion, you may be levied charges for loan foreclosure and part pre-payment. Verify these fees with your lender and confirm if there are other charges or fees associated with the loan, well in advance, to avoid any confusion at a later stage.
Keeping tabs on wedding expenses is imperative since it is very easy to go overboard with marriage preparations. Remember, when you plan for the loan, first weigh the pros and cons of securing a wedding LAP. Use a Loan Against Property Eligibility Calculator and Loan Against Property EMI Calculator to assess the amount of loan you could be sanctioned and the EMI outgo. This will give you a realistic overview of the expected loan before you apply.