Your marriage might be the most important day of your life, but it comes with a hefty price tag. Often, people are seen paying off their marriage bills with the help of their credit cards or by taking a personal loan from the bank. Even the most money-minded bride or the most budget-conscious groom can have a hard time dealing with marriage bills, so it is better to look at wedding loans to fill in the gaps if your funds fall short.
However, every bride and groom, or anyone planning a wedding for that matter, should understand what a marriage loan entails, and carefully consider every option available.
A marriage loan is essentially a loan that bankers give their customers in one go, i.e., an upfront lump sum, which ideally the brides, grooms and/or their families are supposed to pay back the principal and interest in a set number of consistent monthly payments.
Wedding loans, which are often considered as personal loans for a wedding are typically available from three sources: banks, credit unions, and online lenders.
Banks offer the best loans to people with a high credit score, so more often than not, they aren’t the best possible sources for availing a wedding loan. Credit unions, on the other hand, may offer better rates than those offered by traditional banks, but quite a lot of times, you have to be a member to avail loans from unions. As for online lenders, they often lend money in the form of loans to borrowers whose credit scores don’t qualify for bank loans, but who have other characteristics that contribute to their creditworthiness.
Who can be eligible for a marriage loan?
Legitimate and reputable lenders usually have an array of criteria when they sit down to decide who can and cannot be considered eligible to apply for a marriage loan.
- Credit Score: Most lenders require their customers, i.e. borrowers to have a credit score of at least 600, with the best rates and terms going to those with scores higher than about 700.
- Employment: Most lenders like to have their borrowers with steady employment and consistent income to extend them a loan.
- Credit history: A lot of lenders tend to look at a client’s credit history, and for that purpose, may want to check on a customer’s one to three years worth of credit history with no bankruptcies within the past one or two years.
Although having a good credit score is crucial to avail a loan, there are still ways to get a loan on a bad credit score. If you have a time of six months in your hands, there are ways to ensure you get your credit score back on track in order to be able to apply for a marriage loan.
You can start with making all your credit payments on time, and in case you are forgetful, try to keep reminders to ensure you’re never late with your monthly payments. In case you have a credit card debt, pay it off immediately so that focus better on reducing the balances you carry on such cards. Moreover, you should not open a new credit card account while trying to apply for a loan, since credit-card applications trigger “hard pulls” on your credit score and can reduce your credit score by about five points.
As for how much you can typically borrow as a marriage loan, remember this: the more creditworthy you are, the better your rates and terms will be for getting a marriage loan, although specific offers for the same applicant vary from lender to lender.
A MoneyTap credit line can help you solve and easily manage your numerous wedding expenses. Once you download, register, and apply on this app, a credit line starting Rs. 25k to 5 lakh is available to you on the app itself, based on your creditworthiness.