How to Plan Destination Wedding with a Personal Loan?
A personal loan dedicated to wedding expenses is known as a marriage loan.
May 14, 2019
Sourav kumar(SEO Executive)
The trend of destination weddings is rapidly picking up in India. More and more people are looking forward to tie the knot in tourist destinations like Goa, Pondicherry, Udaipur, and Jaipur. Such weddings can cost anywhere between Rs 25 Lakh and 25 Crore, and for the ultra-HNIs, it can reach hundreds of crores. While people with larger means can easily plan their dream wedding in an exotic location, for a middle-class family it could just be a dream.
With more financial awareness in India, a lot of couples are opting for a personal loan to plan their dream wedding. Some major banks have also introduced a variant of their personal loan products solely to meet the wedding cost. These loans are also known as ‘marriage loans’ or ‘wedding loans’. Easy approval, simple documentation and competitive rates of interest have encouraged a lot of people to take the personal loan route towards their dream wedding.
The Growing Trend of Destination Wedding
Destination weddings have become popular in India mainly because of the change in people’s attitude and also at their income level. If you go back to 2000, the idea of planning a wedding in a location away from home would be laughed at. However, with increased exposure to western trends and improved spending capacity, couples are now looking forward to give a fresh twist to their wedding. They want to have a wedding like no other, a wedding that satisfies their fantasies of grandeur. Destination wedding movies have also played their part in promoting this culture.
However, uniqueness is not the only reason why people choose destination weddings. There are several other benefits, such as:
Better experience for the same cost- A wedding in your hometown is also not very budget-friendly. If you set a reasonable budget and use the same for a destination wedding, you can have a much better experience with some of your closest friends and relatives.
The wedding is also a holiday- Your guests will never forget the moments that they spent at your wedding as it would be a vacation for them. Whether it is a three-day function or a week-long break, your wedding will be different from the plain and simple weddings.
Guests who genuinely matter- A wedding in your hometown will have a whole network of people waiting to be invited to your wedding. The annoying neighbor, a colleague you did not want to invite, the relative who is always angry- you can get an excuse to keep your special day safe from such these people when you have a destination wedding.
Stunning photographs- How can we forget this? Marriage in a special exotic location makes for stunningly amazing photos and videos which you will cherish for a lifetime. A destination wedding in Jaipur can add a royal touch to your memories with palaces and camels. On the other hand, the blue waters and palm trees of Goa will add a refreshing twist to your wedding photo collage.
Why take a personal loan for a destination wedding?
Destination wedding cost in India is on the rise. Though a middle-class couple can dream of having a destination wedding, they would not be able to bear the loss with mere savings. Also, it is not a good idea to deplete all your savings for marriage expenses. Personal loan comes as a significant financial help for the following reasons-
Easy Approval- Personal loans are readily available nowadays. Most of the banks offer online application facility wherein you have to visit the bank’s website, provide a few necessary details and submit. After this, a bank official will give you a call and guide you through the process. Document collection will be at your doorstep.
No Collateral Required- With personal loans, you do not have to pledge any of your assets for fulfilling your dream of a lavish destination wedding. So, even if you are not able to pay back the EMIs on time, there will be no risk of losing your valuable assets.
Competitive Rates- With rising demand and high competition in the market, banks are also offering low personal loan interest rates to customers. Although the rates vary based on the customer’s profile, you can catch a good deal if you have a good credit score and high income.
Freedom of Usage- Unlike a home loan or car loan, personal loan proceeds can be used to meet any financial requirement. The bank does not monitor the use of the amount. So, even if you have taken the loan for marriage expenses, any surplus can be used for other needs say for your child’s education or to meet any shortage of money at home.
Apart from this, the convenience of repayment also makes the personal loan a good bet for planning a destination wedding. You can easily repay the loan at a minimal cost. There are several costs related to the actual wedding cost which can be met with the personal loan proceeds.
Risks associated with Personal Loans
Although the personal loan is one of the best ways of turning your dream of a wedding into reality, there are certain risks associated with it. Firstly, being an unsecured loan, the rate of interest will be comparatively higher. In case you have an average credit score or a bad credit record, there will be meager chances of availing a competitive rate of interest. Secondly, you may not get a loan for an amount that would suffice the cost of your marriage. It also depends on the bank that how much loan amount they would be ready to give you so that they can be confident about repayment. Thirdly, personal loans also entail processing fee which is charged as a percentage of the loan amount. So, the higher the loan amount, higher will be the processing fee.
What are the alternatives?
Being one of the easiest ways, personal loan is quite popular for meeting the expenses of a destination wedding. But there are other ways as well which could be equally helpful.
1. Loan against Fixed Deposit
This is among the most easily available secured loans. If you have a fixed deposit, you can get a loan against it and use the proceeds for any personal need. 80-90% of the fixed deposit may be given as a loan by the bank. Bigger the fixed deposit, higher will be the amount you will be able to raise against it. By taking a loan against your fixed deposit, you will keep earning interest on your deposit and at the same time fulfil your other personal finance needs.
2. Top-up home loan
If you have a home loan, you can get a top up on the same and use the proceeds for meeting your personal requirements. While a home loan is only meant for purchase or construction of a house, any top up taken on it is more like a personal loan. The rate of interest on a top-up home loan will be lower than that on a personal loan thus saving you a sizeable amount in overall interest payment.
3. Credit Cards
Credit cards can also be used to meet the destination wedding cost in India. But you must remember that credit card is the most expensive form of borrowing, if not paid on time. If you are not sure of timely repayments, this method is not advisable. You can surely use your card to meet any shortfall in the requirement but using your credit cards entirely for the purpose would not be a sensible move.
How to plan a perfect destination wedding?
Destination wedding doubles as a dream vacation for the couples as well as the guests. Hence, it is essential to plan the wedding perfectly so that there are no last minute problems. Consider the costs, bookings, and logistics well in advance. Here is a step-by-step guide-
1. Make a Budget
Even before you start picking the location or selecting a wedding dress, money should be given the utmost preference. Know how much you would like to spend and what portion of it is available with you in the form of savings. This will give you a fair idea of how much borrowings are needed to make your dream wedding the way you always wanted it to be. Keep extra padding for the unforeseen circumstances. If you wish to take a loan, use a personal loan EMI calculator to make an informed decision about the rate of interest and tenure with respect to the loan amount you wish to borrow.
2. Choose a Destination
Picking the location for a destination wedding should not be all about your fantasies or inspired by a movie. It should be a location that makes sense to you and one that the guests will also appreciate. Factor in your budget and at the same time also think about the budget of the guests. Choose a wedding hall, hotel or resort keeping in mind the number of days you will have to be there.
3. Hire a Wedding Planner
It is a good idea to hire a local wedding planner from the place you have chosen. They may not be a dream wedding planner that your friend has a great experience with but they would know the location better and may get you a better deal. Some venues have their own wedding planning division. You can talk to your hotel about it. You would need to scout the venue in person and try to negotiate with the planners. Staying away from your wedding location and managing it from a far can be difficult. With an experienced wedding planner, it will go smoothly.
4. Make the Most of Your Budget
Try to find out as many wedding offers as you can. It will bring down the cost of your dream wedding considerably. Also, look for travel and hotel offers on your credit cards. Start planning six months beforehand, get rid of credit card debts and free up your credit limit so that you can avail maximum offers. You can also accompany your wedding planner at the destination to grab as many local deals as possible. This would considerably bring down the cost of your wedding.
5. Arrange Travel for Guests
With a destination wedding, you would also have to arrange the travel and accommodation of your friends and family. If you have taken a package from the venue itself, it would be much easier to coordinate. They usually have an itinerary for the entire marriage. When inviting your guests, do not forget to mention important details such as address, direction, etc. so that you don’t receive constant texts and calls on your big day.
6. Pack Smartly
When you start packing before the wedding, start with the wedding essentials. There are things that are important and cannot be replaced at the end moment such as the wedding ring, your wedding dress, etc. Contact drycleaners and other services just in case you need last minute touch ups to the dresses.
The Bottom Line
Wedding is a special day for the couples as well as the family. Lack of funds should not come as an obstacle in planning the wedding of your dreams. Personal loans are a sensible way to fund any financial shortfall in your wedding preparation. But before getting a loan, you must shop around for the best interest rates and terms and conditions that match your requirements. You can start the search with a bank you already have a relationship with. Usually, banks are more liberal in negotiating with their existing customers, especially if they have a good track record. Start planning well in advance and don’t leave anything for the last minute. When your finances are sorted, everything else is likely to fall into place easily.