Personal Loan for Wedding: Should you take loan to fund marriage expenses?

A Wedding loan, which is just a form of a personal loan, is best avoided.

Indian weddings don’t need an introduction. And they get the adjective of ‘Big-Fat’ for a reason. Glamorous as they can be at times, they are also notorious for their opulence and for being a huge burden on finances.

And if you are familiar with old Bollywood movies, you will that remember had a storyline where the daughter’s parents used to mortgage their land and borrow money to fund her wedding and keep repaying the loan sharks for years till their end!

Fast forward to the present day, things are definitely better.

The wedding dynamics

There is a growing trend among youngsters nowadays to contribute towards their wedding expenses and not have their parents burdened. While this is an appreciable thought, it works best if the children have saved up money for this. If not, then their only option is to borrow.

And that brings us to the question that we started with - Should you take Loans to fund Marriage Expenses?

A wedding is a once-in-a-lifetime event (hopefully!), and there is no denying that. And naturally, almost everyone wants to make it a memorable event.

And if you don’t have much savings and you still want to have a ‘good’ wedding ‘socially-speaking’, then lenders are willing to lend you money! And while these lenders will try to sugarcoat things to change your perspective about marriage loan being a kind of investment to help create beautiful memories and what not, the reality is that it is simply good business for them (as an unsecured personal loan for the expenses related to marriage).

Should you take it, if you plan to get married and you don’t have much savings and still want to have a so-called socially-acceptable wedding?

I don’t think so.

A Wedding loan, which is just a form of a personal loan, is best avoided.

In general, and in purely mathematical terms, it is best to borrow to acquire appreciating assets. And this is not the case as a wedding loan is just about funding expenses that you are socially forced to incur due to societal pressure! It can turn out to be a very expensive way to get married.

Also read | Tying the knot? Tips to keep your wedding budget in control 

Reducing the wedding budget

My simple view here is that - If your savings aren’t enough, then consider reducing the budget and bringing your expenses within your budget instead of borrowing.

Just because loans are available for this doesn’t mean you should take one. After the wedding, you will be paying the EMIs and not the guests for whom you took a loan to do a grand wedding!

And even if for some reason, you need to borrow, don’t borrow more than what is really necessary. Borrow just for the basics and not for the showbiz part of the big fat Indian wedding! Let me explain this with a real example I shared earlier also when I wrote about how low-key weddings make a lot of financial sense.

During the pandemic, a cousin of mine got married. While both family’s combined expense estimate was about Rs 25 lakh, they ended up doing everything in just Rs 8-10 lakh (due to lockdown-related restrictions). This lean wedding help both sides save a total of about Rs 15 lakh. And I being an investment advisor tried to show him the brighter side by explaining how this Rs 15 lakh saved for even a conservative 7-8% for the next 2-3 decades, can easily become a huge corpus. While my cousin wasn’t very happy back then, he now sees the merit after about 3+ years of marriage. From what I know from him, he did end up investing a major chunk of that money and it has done quite well thanks to the runup in our markets over the last few years.

Also read | How to accumulate gold for your children's wedding?

So, all said and done, I think that if you want to be married soon, then get married at a cost you can afford right now. And if you want a big wedding, then wait, and save for it first. If you are in your mid-20s and plan to get married in a few years’ time, start saving from today itself!

Don’t burden yourself and your spouse unnecessarily by justifying spending on showing off!

And if some parents are reading this article, then here is a request - If you do not have sufficient retirement savings and you are planning to spend a lot of money in your child’s marriage due to societal pressure, then please don’t do that. Don’t dip into your retirement savings!