The big fat Indian wedding for modern-day millennials

Personal loans for weddings

Deloitte India and Retailers Association of India published a report called ‘Trend-setting millennials: Redefining the consumer story’. This report stated that millennials comprised about 47% of the active workforce in India. Of the income that millennials earn, a major part is spent on living essentials. The incremental income is then spent on the following –

 

On entertainment and dining 32.7%
On apparel and accessories 21.4%
On electronics 11.2%

 
Moreover, millennials favour utilising their incomes rather than saving it in their bank accounts as their savings account balance account for only 10% of their incomes, incremental income included. (Source: Livemint)

The report presented a realistic look into the spending habit of modern-day millennials. Today’s youth is aspirational. They want the best of everything and so don’t hesitate to spend. When it comes to marriage, their expectations take on a new high. Given the changing lifestyle trends, millennials want the best wedding for themselves. The concept of a big, fat Indian wedding is attractive as it allows them to embark upon a memorable experience. Marriage is a once in a lifetime milestone and they don’t want to leave any stone unturned to make it a grand success.

Marriage entails a lot of expenses like catering, booking a venue, arranging for gifts, accommodation for guests, event management and the like. Amidst so many expenses, personal savings go for a toss. Many often than not, the savings fall short of meeting the high cost of arranging a wedding. In their desire to have a fairy tale wedding, millennials usually resort to loans to fund the expenses.

 

Personal loans for weddings

Personal loans are offered by leading banks and non-banking financial companies which can be used for funding your marriage related expenses. The loans are collateral free loans which do not require any security to be mortgaged. Moreover, personal loans are available at the earliest and involve minimal documentations. Given the ease of availing a personal loan, it becomes the go-to choice for many millennials for their wedding’s financial requirements.

 

Benefits of personal loans

Personal loans have the following benefits –

  • Since the loans are collateral free, they can be availed by anyone
  • The repayment can be done over a period of 5 years making the loan affordable
  • The loan can be availed online within the shortest possible time
  • The loan has a simple eligibility requirement which suits almost all types of borrowers.

 

Things to remember

Though loans are a great way to fund a wedding, there are some aspects of the loan which you and your clients should keep in mind. These include the following –

  • Interest rate

Every loan comes with an interest rate attached to it. So, when you or your clients avail a loan, an interest would have to be paid on the outstanding amount. This interest is an additional cost which you or your clients have to bear. Personal loans, being unsecured in nature, have higher interest rates. So, though you or your clients can avail a loan, be mindful of the interest associated with it as you the interest cost is paid from your pockets.

  • Effect of repayment default

Loans are usually paid through EMIs. If you or your clients miss any EMI payment, there would be serious repercussions. Firstly, there would be a default fee which would be another type of expense on your and your client’s finances. Secondly, the credit score would suffer. The score would be reduced on any default that happens. Lastly, in case consecutive EMIs are not paid, the lender might initiate a legal action against you and your estate. You should, therefore, understand the EMI liability when you avail a loan and make your clients understand the same.

 

What can be done?

The ideal thing to do would be to meet all the marriage related costs from personal funds. Borrowing should be avoided. If, however, you or your clients want a grand wedding and the personal funds are limiting the scope, first, use the available personal funds and then meet the shortfall with a loan. Always advise your clients to compare the loan interest rates offered by different lenders to find the cheapest loan offer.

Marriage is an important milestone of everyone’s life. It should, therefore, be celebrated in a memorable manner. However, you and your clients should be aware of the loan’s affordability. If loans are needed, ascertain their affordability and ensure that the loan doesn’t put a financial burden on you in future. Organise a grand wedding but only within your means.

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