Now, big rush for wedding loans

Major banks and NBFCs like HDFC Bank, ICICI Bank, Tata Capital, State Bank of India, Axis Bank, Citibank, IDBI Bank, Punjab National Bank, Kotak Mahindra, Bank of Baroda, etc., have already started offering the wedding loans

• Minimum Age: 21 years (23 years for some banks)
• Net monthly income: Rs 15,000 and could go up Rs 25,000 depending on city where you live, age and other criteria
• Employment: Salaried or self-employed persons
• Status: Working for a total of at least 2 years prior to applying for a loan
• Credit score: A CIBIL score upwards of 700 is preferred, a maximum cap of 900

Hyderabad: With the range of personal loans getting stagnated, banks are now turning towards the newer offerings such as wedding loans to woo customers. The new product is slowly but steadily gaining popularity as wedding expenses are now skyrocketing.

Taking loan for marriage may be a symptom which explains the growing incidence of indebtedness, as observed by the economist Jayati Ghosh.

That means, weddings are expensive, no doubt, and what if you don’t have funds or have no sufficient savings, the banks say take a loan.

Here is an opportunity from banks and financial institutions, including NBFCs, who are offering loan for parents to perform their children’s wedding or to the prospective brides, bridegrooms or both.

According to the retail banking professionals, the wedding loan market in Hyderabad alone is about Rs 500 crore during the peak of the wedding season, and in the united AP (Andhra and Telangana) it may even double. “Over 20 per cent of the personal loan portfolio is being targeted to marriages,” say a banking official. Though there is no authentic figures it can easily cross over Rs 1,000 crore in both the states together, he added.

It is unsecured personal loan, and one can raise the loan from a minimum of Rs 50,000 to a maximum of Rs 15 lakh depending on one’s need and repaying

capacity. Personal loans assistant general manager Adiraju reveals that even the marriage loans are being taken by the pensioners who hold pension accounts in their banks. “In a month we sanction personal loans of about Rs 30 crore in the Hyderabad circle, and about 20 per cent to 30 per cent are being used for marriage of their children.”

For instance, the State Bank of India alone sanctions about Rs 2,000 crore per annum towards personal loans and a major portion goes to marriages, he pointed out. Major banks and NBFCs like HDFC Bank, ICICI Bank, Tata Capital, State Bank of India, Axis Bank, Citibank, IDBI Bank, Punjab National Bank, Kotak Mahindra, Bank of Baroda, etc. have already started offering the wedding loans.

In fact, Tata Capital has recently crafted a new product that suits the ‘would be’ couples to make their wedding day a special. The bride or groom or both can take a loan up to Rs 15 lakh depending on the need and their credit score. Personal loans would benefit the customer as he need not provide a guarantor or any collateral and even they need not give any reason for the loan.

Only the banks will see the capacity to repay the loan by the borrower. However, the loan money should not be spent on stock markets, Adiraju pointed out. While interest rate is between 13.49 per cent and 34 per cent with a processing fee up to 2.5 per cent., the tenure of the loan can be 1 year to 5 years.

By:K V V V Charya