Marriage Loan

Overview about Marriage Loan

The big day you’ve been waiting for is approaching faster than you anticipated! In the rush of sorting out your food options, venue, sending out invitations and making sure your ex doesn’t turn up, you may or may not have the time to plan out your finances.

True, you’ve been saving for this occasion for a while and have a sizeable amount kept aside, but is it enough? Or if you haven’t specifically saved for this occasion and are in dire need of funds, take a deep breath and relax – because banks have got you covered!

Banks today are lending custom, tailor-made personal loans called marriage loans to smoothen out any finance-related kinks you may have in your entire wedding scenario. As all Indians from any walk of life can testify, marriages here are magnificently elaborate, exuberant functions which compete with each other in terms of grandeur, opulence and luxury.

In order to meet the rising need for “personalised personal loans”, major banks and Non-Banking Finance Companies (NBFCs) like HDFC Bank, ICICI Bank, Tata Capital, State Bank of India, Axis Bank, Citibank, IDBI Bank, Punjab National Bank, Kotak Mahindra, Bank of Baroda, Capital First, etc. are rising to the challenge. Personal loans today refer to a rather wide variety of customized loan products including marriage loans, home renovation loans, business loans, education loans, medical emergency loans, etc.

As we all know, personal loans today give the customer the benefit of not having to provide a guarantor, or any collateral, should the loan prove to be unrecoverable. Customers need not even give the bank a reason as to why they require the loan. This is a problem for the banks, as anyone could approach them for a loan without giving a reason for the same and turn out to be a defaulter. While your reasons could be totally under your discretion, it would instil in the bank a sense of faith in your ability to repay, if your reason for wanting the loan was to fund your marriage.

Marriage Loan Eligibility Criteria

To avail a Personal Loan for the purpose of funding your marriage, you must first see if you match the general eligibility criteria put forth by most banks. Your eligibility is dependent on a number of factors and criteria, a combination of which would not be the same for every applicant. This includes:

• Minimum Age of 21 years (23 years for some banks).
• Maximum Age of 58 years (for salaried employees) and 65 years (for self-employed persons). If you’re getting married at this age, kudos to you, my friend!
• Minimum Net Monthly Income – Rs.15,000 in most cases, although the minimum income requirement could go up Rs.25,000. This depends on your current city, age, etc.
• Employment Type – Salaried employees, salaried professionals, self-employed persons.
• Employment Status – salaried employees and self-employed persons alike must be drawing regular income for a total of at least 2 years prior to applying for a marriage loan, and must be drawing regular income from the current employer or business for the last 1 full year.
• Credit Score – A CIBIL score upwards of 700 is preferred, although some banks have a minimum CIBIL requirement of 750. This score has a maximum cap of 900.
• Maximum Loan Amount – Rs.30 lakhs – this is dependent on all the above factors including repayment capacity and existing loans with EMIs, etc. Usually loans are approved in the Rs.5 lakh to Rs.20 lakh range.

It should be noted that different banks view these criteria differently, for example Bank A may not require you to be any older than 21 years, but may require a CIBIL score of 800, but Bank B may have a hard set rule that you must be at least 23 years old, but can have a CIBIL score of 700. The banks basically decide your eligibility and maximum loan amount by your ability to repay the same.

Documentation required for a marriage loan

Before banks and NBFCs approve or deny any loan application, they will require you to submit a full set of documents for their perusal. This set of documents contains information vital to the banks, to help identify you, your address, your employment details or business details, and eventually decide whether you will be able to repay the loan or not.

A common set of documents must include:

• Valid Proof of Identity. This can be ascertained by submitting any one or a combination of the following (in case one proof does not have a photo ID) registered, legal proofs of identity.
• Passport.
• Voter’s ID.
• Permanent Driving License.
• PAN Card.
• Aadhar Card.
• Photo Ration Card.
• National Rural Employment Guarantee Act (NREGA) Job Card.
• Valid Proof of Address. Fulfil this requirement by submitting any of the following documents.
• Passport.
• Voter’s ID.
• Permanent Driving License.
• Ration Card.
• Electricity / Water / Telephone bill.
• Domicile Certificate with address issued by the Municipal Corporation.
• Registered Rent or Lease Agreement.
• Proof of Age. Usually, you won’t have to submit this separately. But in case your proof of ID does not have your age, you will have to submit one of the following:
• Birth Certificate.
• School leaving certificate.
• PAN Card.
• Financial Documents. These will go a long way in helping the bank decide whether you will be able to repay your loan on the agreed terms or not.
• For salaried individuals – Latest salary slip showing statutory deductions or Form 16 and salary account statements for the last 3 months.
• For self-employed individuals – Audited / certified financials (P&L Account and Balance Sheet) and Acknowledged IT returns for the last 2 years and Bank statement of the primary account for the last 6 months.
• Loan Application Form. This is the form that you will fill in from the bank of your choice stating all the above details and the loan amount required, etc. This will be provided by the bank and all the details filled in will, in some way or the other, affect your maximum loan amount and eligibility.

Interest rates on marriage loans

Interest rates on personal loans and marriage loans vary between banks and your eligibility criteria. Not everyone will get the same loan at the same interest rate for the same tenure.

General interest rates and charges for personal loans are as follows:

• Interest Rate (Monthly reducing balance) – 13.49% – 34%.
• Processing Fees – 0.5% - 2.5%.
• Loan tenure – 1 year to 5 years.
• Pre closure charges – 2% - 5%.

These rates are indicative of the general trend in personal marriage loans charges today.

Features and Benefits of marriage loans

Marriage loans are in most respects the same as personal loans, but are taken with the purpose of funding a marriage.

• Easy repayment with EMIs most banks offer incredibly flexible and customer friendly EMIs, tenures and interest rates.
• No guarantor required – which means you won’t have to bug anyone to come down and stand as guarantor to your loan, and the loans are approved without requirement of collateral, either. This means that no one will kick you out of your house if you fail to repay.
• Loans are approved within 48 hours of application in most cases, and there have been reports of loans being approved the very next day, making this a strong and viable option for quick personal finance.
• Credit Shield.
• Disbursal in 2 days from approval. No more waiting for your money once your loan has been approved. Banks today are sending you the money within 2 days of accepting your loan application.
• Flexible tenure options offered by banks from 12 months for those who wish to be done with the hassle of repayment early, to 48 and even 60 months for those who plan out their expenses more carefully.
• Most banks today provide personal accident insurance cover with their personal loan products.
• Customizable plans, rates and schedules depending on the customer. Banks today work with you for mutual benefit.
• Fulfil your dreams today, and repay what you owe, as you grow.
• Pre-payment facilities on offer enable you to clear your entire outstanding loan balance after the minimum pre-communicated number of days have passed (usually 180 days).
• Marriage loans are a type of personal loan that is easier to acquire than the others. Banks generally undertake a huge amount of risk when the reasons for the loan are not mentioned, but can relax in case of a marriage loan as there is an inherent trustworthiness in family functions.

Frequently asked questions about marriage loans

Marriage loans are basically a type of personal loan. Think of your loan as a personal loan, but for the purpose of funding your marriage.

No, despite everyone takes the loan for a specific purpose, the loan amounts that get approved vary from one another and are dependent on a lot of factors.

Your loan amount that eventually gets approved or denied, depends on your age, net monthly income, employment type (salaried, self-employed, salaried professionals), employment status (term of employment, employability, etc.), CIBIL credit score, existing EMIs being paid, and in general, your ability to repay.

The bank will require your proof of ID (with photograph), proof of address and proof of income.

Most major banks and NBFCs in India offer marriage loans, like Punjab National Bank, ICICI Bank, State Bank of India, Citibank, IDBI Bank, Kotak Mahindra, HDFC Bank, Bank of Baroda, Capital First, Tata Capital, Axis Bank among many more.