25 Sep 2017 16:10 IST

Ring in a loan for those wedding bells

Many financial institutions offer special wedding loans. But should you go for them?

As the festival season kicks in, the country gears up for the wedding season as well. From booking a marriage hall and finalising catering arrangements to inviting relatives and friends, a myriad plans will have been set in motion. And, yes, all these plans revolve around the all-important budgeting.

But are you worried that the actual expenses may overshoot your budget? There are many financial institutions to help. Banks and non-banking financial companies (NBFCs) offer special loans for weddings and related expenses.

State Bank of India (SBI), Corporation Bank, ICICI Bank, Axis Bank and NBFCs like Tata Capital and Bajaj Finserv offer special wedding loans. These loans are typically a variant of the general personal loans offered by these institutions, but for the purpose of meeting wedding expenditure. In most cases, there is not much difference between the wedding and a general personal loan in terms of the interest rates or charges.

Eligibility and tenor

Wedding loans are available to both self-employed and salaried individuals between the ages of 21 and 65. The person getting married or his/her parents can take this loan. If you are a salaried individual, you need to meet the minimum income criteria specified by the institutions. Most banks expect you to have minimum two years of work experience and also a slab on your monthly income. For an Axis Bank wedding loan, your salary must be at least ₹15,000 a month. The income criteria differ based on where you live. For instance, to get a loan from ICICI Bank, your monthly income should be ₹17,500 if you are in Mumbai and ₹25,000 in Delhi.

The eligible loan amount can go up to ₹25 lakh, as in the case of Bajaj Finserve. The loan amount also varies between locations, based on where the lender is. For example, Corporation Bank, under its “Corp Shubha Vivah Scheme” offers a maximum loan of ₹10 lakh in the metro cities while in urban centres it is just ₹2 lakh. The amount sanctioned will also vary based on your credit score.

Tata Capital, which offers a maximum of ₹15 lakh as wedding loan, states that a higher loan amount is possible depending on your credit score. Corporation Bank also allows you to add co-applicants, to a maximum of two, to supplement the repayment capacity and enhance the loan eligibility amount. Loan tenors vary across banks and NBFCs.

The tenor is up to five years in ICICI Bank and Axis Bank while SBI, under its “Saral Personal Loan” lends for weddings up to four years.

Tata Capital and Corporation Bank offer much higher loan tenors of up to six years and seven years, respectively.

Interest rates, other charges

The interest rates and other charges, such as processing fee, are largely similar to those offered under the general personal loan product category. Bank interest rates vary between 11 and 22 per cent, as in ICICI Bank. In case of NBFCs such as Tata Capital, the interest rate range is narrow, between 11.5 per cent and 19 per cent. Corporation Bank lends based on the MCLR and the current rate charged is 12.65 per cent (MCLR+4 percentage points).

Processing fees also vary. SBI and Bajaj Finserv charge up to 3 per cent of loan amount. Corporation Bank charges the lowest processing fee of 1 per cent. Axis Bank will waive the processing fee of 1.5 to 2 per cent if your credit score is good. Prepayment charges are also applicable. Bajaj Finserv charges a lower prepayment charge of 2 per cent while in ICICI Bank it is much higher at 5 per cent. However, in Corporation Bank there is no prepayment charges.


Documents such as income proof, salary details, bank statements, identity and address proofs, that are required for a general loan, are to be submitted for a wedding loan too. Apart from this, if an individual getting married takes a loan on in his/her name, the wedding invitation or bookings pertaining to the marriage hall or catering arrangements, are other important documents to be provided.

If parents take the loan, they have to submit documents to prove the relationship with the person who is getting married. For the self-employed, documents pertaining to the business or their profession, such as the income statement and tax returns, are needed.

Should you go for it?

Since wedding loans are a variant of the general personal loan in most cases, should one go for this specific product or will a normal personal loan suffice? Experts say that opting for a normal personal loan is much better than going for a specific wedding loan, for a few reasons. They say that interest rates and charges may be higher on wedding loans compared to normal personal loans. Vikas Kumar, Co-Founder, LoanTap, says, “Since you approach the institution for a wedding loan, they will know that your need is actually large and urgent, and may want to use the opportunity to charge higher rates”.

A wide range of options offered by banks and NBFCs is another reason to choose the normal personal loan over the wedding loans. Only a few institutions offer wedding loans as a special category whereas a normal personal loan is offered by everyone. Rishi Mehra, CEO, Wishfin.com, says: “One should not restrict oneself in looking for a wedding loan. It is better to take a personal loan and use it for the wedding as the choice is wide and it’s very likely you will get better deals”.

(The article first appeared in The Hindu BusinessLine.)