Indian weddings are extravagant affairs extending through multiple days of celebrations and festivities. Although the atmosphere remains full of joy and delight, the expenses may add up quickly for the host. However, covering wedding-related expenses has become much easier these days due to the easy availability of wedding loans.
A marriage loan is an unsecured personal loan that borrowers can use to cover any planned or unplanned expenses for a wedding, whether it is for the venue, catering, outfit, decorations, photographer, etc. Easy application and fast approval of these loans make them an ideal financial source for weddings. However, you may keep the costs low by finding a loan with the lowest interest rates. These are a few ways to avail of low-interest loans to cover wedding expenses.
Ways To Avail Low-Interest Loans to Cover Wedding Expenses:
- Be Consistent with Your Payments: When you apply for a wedding loan, the lender wants to see how responsibly you handle your existing credit. Therefore, try to pay all your loan EMIs and credit card bills before the due date. Missing these payments attracts late-payment penalties and also reduces your credit score. Lenders will not approve your loan application if you regularly miss your existing payments. A history of regular repayments may help you grab a wedding loan at the lowest interest rates.
- Compare Lenders: You will find multiple lenders offering wedding loans. However, each lender may have different interest rates, repayment tenures, and other terms and conditions. To get a loan at the best interest rates, you must research and find the interest rates offered by different lenders. Many lenders provide a personal loan interest rate calculator on their website, which you can use to calculate the interest rate applicable to your wedding loan. The key is to find a lender offering the lowest interest rates.However, the interest rate is not the only factor you must consider while comparing lenders. Before finalizing a lender, look at their loan amount, repayment tenure, fees and charges, customer service, and other factors.
- Calculate Expenses and Borrow Minimum: The total wedding cost may cover different expenses, including the venue, photography, catering, decorations, gifts, and others. All these expenses add together to make a significant amount. You must calculate all these expenses and borrow the minimum amount within which you can cover all of them. Do not borrow extra just because you are eligible for it. After all, you will be repaying it along with the interest amount. Therefore, borrowing a lower amount will automatically lead to reduced interest costs. The lenders may also agree to offer you a better interest rate due to the lower risk involved.
- Select a Shorter Repayment Tenure: Wedding loans are personal loans that come with flexible repayment tenure. You can use a personal loan EMI calculator to select a loan tenure with the EMI amount you can adjust within your monthly budget. Shorter loan tenure may lead to bigger loan EMIs, but it will eventually keep your interest outgo low. Choosing a longer loan tenure may keep your EMIs smaller, but it will cost bigger on the total interest cost. So, selecting a shorter repayment tenure will eventually help you save money on the interest outgo.
- Maintain a Low Credit Utilisation Ratio: The credit utilization ratio is the percentage of the available credit you use on average. Ideally, you should not use more than 30% of your available credit limit. A low credit utilization ratio also improves your credit score, which eventually helps you get a wedding loan at a lower interest rate.
- Improve Your Credit Score: Lenders largely depend on your credit score to determine your creditworthiness. Ranging from 300 to 900, the higher your credit score is, the lower the interest rate you may negotiate with your prospective lender. A high credit score makes you eligible for a higher loan amount at a lower interest rate. Some sure-shot ways to improve your credit score include making timely payments, maintaining a low debt to income ratio, keeping the credit utilization rate low, diversifying the credit mix, and so on. A high credit score gives you a better chance to grab the lowest interest rate marriage loan to cover your wedding-related expenses.
- Avoid Multiple Loan Applications Simultaneously: Many people apply for several loans simultaneously, hoping for approval from at least some of them. However, this is one of the worst ways to apply for a loan. Multiple loan applications only project you as a credit-hungry borrower. Each application also pulls a hard inquiry on your credit report, thereby reducing your credit score. Therefore, compare the lenders beforehand and apply for one loan according to your eligibility and repayment capacity.
Are you looking for a marriage loan in India? Use the tips mentioned above to lower your interest rate and grab the best deal. Get the best loan offer at the best rates and make your dream wedding come true without any compromises.