Marriage Loan

Marriages in India are generally expensive due to the various wedding customs and rituals involved in them. Handling the finances of a wedding can have a huge impact on your savings if not planned in advance. Multiple banks as well as non-banking financing companies (NBFCs) provide custom, tailor-made personal loans called marriage loans to smoothen out any finance-related kinks you may face while planning for your entire wedding scenario.

A personal loan can be availed for various reasons such as home renovation, marriage of self or a family member, higher education, medical emergency, vacation expenses, and so on. In order to meet the rising need for customised personal loans, a number of major banks and NBFCs offer personalised loans to meet the specific financial requirement of the customers. The top lenders that offer personal loans in India are 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.

The biggest benefit of personal loans is that the borrower does not need to disclose the reason for availing the loan and the funds received from this loan can be used for any purpose including marriage. Furthermore, since it is an unsecured loan, the applicant does not need to provide any guarantor or collateral in order to avail this kind of a loan. However, this means that a personal loan is a high-risk financing scheme in terms of the lender. Therefore, the policies and eligibility criteria in place for this scheme are much more strict as compared to other secured loans to ensure the timely repayment of the debt and reduce the chances of defaulting.

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 and NBFCs. Your eligibility is dependent on a number of factors, a combination of which would not be the same for every applicant. Therefore, these also determine the maximum amount of credit that the borrower will be able to secure using this financing scheme. The eligibility criteria for a marriage loan includes:

• Minimum Age: The applicant should be at least 21 years old in order to avail this loan. However, the minimum required age is 23 years for some of the banks.
• Maximum Age: In case of a salaried employee, the maximum age of the applicant to avail this loan is 58 years. However, if you are a self-employed person, you should be less than 65 years of age.
• Minimum Net Monthly Income : For marriage loans, the required minimum net monthly income varies from lender to lender. While this amount is Rs.15,000 in most cases, the minimum income requirement could go up to Rs.25,000 as well depending on the applicant’s current city of residence, age, etc.
• Employment Type: Marriage loans can be availed by salaried employees, salaried professionals, and self-employed persons.
• Employment Status: The applicant must have a regular and stable source of income with a minimum of 2 years of total work experience in order to be eligible for a marriage loan. Additionally, the applicants also must have a minimum of 1 year of work experience with the current employer or business.
• Credit Score: In order to secure a marriage loan, a CIBIL score of more than 700 is preferred. However, some banks have a minimum CIBIL requirement of 750 with a maximum cap of 900.
• Maximum Loan Amount: The maximum loan amount that can be withdrawn to fund a marriage varies from lender to lender. While the amount a borrower can avail depends on many factors such as income, repayment capacity, existing loan EMIs, and CIBIL score, the quantum of approved loans usually range between Rs.5 lakh and Rs.20 lakh.

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. On the other hand, Bank B may have a strict 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 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.
• Voters 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.
• Voters 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.

Marriage Loan Interest Rates

As per the recent guidelines from the Reserve Bank of India (RBI), personal loan interest rates should be dependent on the benchmark Marginal Cost of Funds-Based Lending Rate (MCLR) of the bank. Since the MCLR is updated according to the repo rate of RBI, the rate of interest will be revised after each time the repo rate changes. Therefore, it is advisable to get in touch with your bank to learn about the ongoing interest rate on personal loan. Furthermore, depending on the eligibility of the applicant, banks and NBFCs decide the applicable rate of interest on a loan withdrawn for marriage purposes.

See the table mentioned below to learn about the top banks that offer marriage loans along with the interest rate, processing fees, loan tenure, and pre-closure charges they carry:

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 in order to avail these loans which means you won’t have to bother 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.
• Borrowers can avail the benefit of Credit Shield an insurance cover that waives off outstanding credit card bills under certain circumstances.
• 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 by receiving the required funds without the need to provide any collateral.
• Prepayment 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.

Marriage Loan FAQs

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 along with a duly-filled and signed form and 2 passport-size photographs.

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.