4 MinsDec 21, 2021
Shankar Sharma, 28, is getting married in a month. Since he got engaged three months ago, Shankar and his parents have been busy with the planning for the wedding -- booking venues for the various functions, selecting the menu, looking for hotels
for the outstation guests, buying clothes, ornaments, gifts, and so on.
The family had some funds set aside for the wedding. In addition, Shankar also decided to avail a personal loan of Rs. 5 lakh, since he wanted his D-Day to be perfect. Given his spotless credit history, his bank offered him a quick and hassle
free personal loan for Wedding, which worked to his advantage.
His father was slightly sceptical about the decision, but here is what Shankar told him:
Wedding budgets tend to go awry. Better to have ready funds
Almost inevitably, wedding expenses tend to overshoot budgets. For instance, the number of guests may increase at the last minute, the hotel and banquet halls may
raise tariffs or including exotic dishes on the menu could increase the caterer’s bill. It makes sense to have some extra funds ready instead of fretting about all this at the last minute.
Collateral-free loans at affordable interest rates
Personal loans are unsecured loans, which means that the borrower doesn’t have to pledge any asset like
property or shares. They also come at very affordable interest rates. Besides, a borrower has flexibility to choose the tenure suited to them and foreclose in case the funds
are available before end of loan term.
Since he was an existing bank customer Shankar did not have to furnish a long list of documents to the bank. When he explained this, his father agreed that this was much easier than running around at
the last minute to raise funds.
[Also Read: How Long Does It Take To Get a Personal Loan Approved?]
No end-use restrictions
For Shankar, the biggest advantage was that a personal loan does not have any end-use restrictions. While he had primarily borrowed to fund the wedding expenses, he could always use it to buy new consumer
durables – like a new fridge or a new air conditioner for his home, if required or plan a vacation post wedding with his new bride.
No need to dip into savings account
Since he started working, Shankar has been very careful about financial planning and has
several SIPs (Systematic Investment Plans) for mutual funds. When his father suggested that he could have dipped into them instead of taking a loan, Shankar pointed out that most of his MF schemes had performed well, in tune with the markets.
If he liquidated these MF units, he would be missing out on the potential upside. There was also a possibility that he would have to pay capital gains tax since the value of the units had gone up. By availing of a personal loan, he has avoided
both these possibilities.
Axis Bank offers a range of Personal Loans tailored to meet the needs of most borrowers. You can also calculate your personal loan EMI online and use Axis Bank's EMI calculator.