Personal loan for wedding: 5 key things one should know before applying | Mint

If you are planning to host a wedding and running out of money, you may consider taking a personal loan for the same. Although personal loans – being unsecured – carry a high rate of interest, they come handy during emergencies and other necessary events of life such as a wedding.

However, before you decide to take a personal loan for hosting a wedding, you must consider the following points.

Personal loans for wedding: 5 points to consider

1. Evaluate the real need: One of the key recommendations is to avoid overborrowing. You may plan your wedding budget carefully and borrow only what you definitely need. You may consider whether some expenses can be cut down, deferred, or paid via savings or other low-cost methods.

2. Compare loan offers: You could check interest rates (fixed vs floating), processing fees, and prepayment charges. It is also recommended to use online loan comparison tools to assess different banks and NBFCs.

3. Understand the total cost: It is recommended to look beyond just the monthly instalment. You should consider interest over the full tenure, processing fees along with late payment penalties and foreclosure charges.

4. Check your credit score: A higher credit score (over 700) typically gives you lower interest rates and better loan terms. If your score is low, consider improving it before you apply.

5. Be realistic about repayment: Also, the borrower must ensure their monthly EMIs fit comfortably within your income. Do not compromise emergency savings or other essential financial goals.

Additionally, you should avoid unsecured instant loans with extremely high interest. If parents or relatives are offering to help, weigh that before going into debt.

Disclaimer: Mint has a tie-up with fintechs for providing credit, you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit score. Mint does not promote or encourage taking credit as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.