Are you starting your married life with a loan?

Written by Lisa Pallavi Barbora

Lisa Pallavi Barbora is a Senior Consultant for Content at WFAN. Lisa is also a founder of In her earlier avatar, she was a National Writer and Consultant for HT Mint - a premier business journal in India.

February 10, 2021

Marriages are made in heaven, they say, and weddings are the beautiful path to get there. If you too have found the partner you want to spend your life with, a wedding ceremony is the natural next step.

However, weddings are not just about the two people exchanging vows to be together forever. Weddings invariably become about having all your family and friends over, along with the neighbours who you see every day, the numerous colleagues and acquaintances who you have pleasant associations with over the years. It’s not just your neighbours and friends, but also your partner’s neighbours and friends, your parents’ neighbours and friends and people your siblings may want to invite. Having so many people at one place makes for an excellent celebration but also can get expensive and chaotic.

Alternatively, you may choose to get away from the noise of it all and have a destination wedding with the closest few. Whatever the choice of celebration a wedding costs money.

If you haven’t saved and planned for it, you will probably go to your parents seeking their monetary support for your wedding. What if they too haven’t planned or saved for your wedding? Banks offer personal loans for this reason; if you don’t have the amount of money you need you can simply take a loan from your bank and use that money.

Is taking a loan really that simple?

Loans come at a cost

Having access to a bank loan does make life easier in terms of being able to afford more than what you have money for, however, in reality loans make your life easier today but the costs get added for your future life and future self. All loans come at a monetary cost.

Banks charge anywhere between 10.5% to 22% per year for a personal loan. This amounts to paying an annual interest charge of anywhere between ₹10,500 to ₹22,000 on a ₹1 lakh loan. Add to that a one-time processing fee of around 2% and your costs go up even more.

A wedding can cost a lot more than ₹1 lakh and consequently your interest cost and processing charge will also be higher. If you didn’t have the funds to spend on your wedding, chances are that repaying the loan is not going to be a comfortable monetary expense. Do you really want to start your marital journey stressing about loan repayment?

The immediate desire post wedding is usually centered around finding a new home, setting it up and beginning the life you dreamed of. Since, the wedding went off well with the help of a loan, you may be tempted to take on another one to fund the subsequent expenses. Taking loans is tempting because it seems like the immediate easy way out.

Eventually, if you pile on too many of them, it will cause a burden on your finances. Remember the reason you took those loans is because you couldn’t afford to spend what you did in the first place.

Expensive loan repayments thrown into the mix can make your relationship and communication needlessly stressful at a time when you need to focus on personal harmony and building a life together.

Buying and spending on things that you can afford is a much simpler way to begin a new journey in life.

The lure of status

The expense aside, by using bank funds to have a large wedding and maybe even to set up your home, you are signaling to people a certain social status, which in reality is false.

Once, this signal has gone out, you may feel pressured to keep up appearances. This in turn leads to being stuck in stressful jobs, more loans and creating a façade of affordability that can become a burden.

When you get married, you are just starting a new phase of life. There is a lot to look forward to and a lot to build. As your family grows, you will need savings to cater to their needs, then and in the future. Trying to match status with your neighbours or your friends is a taxing affair that will only push you to focus on a single aspect of your life which is money.

A balanced and secure life requires you to manage money along with all the other aspects.

Taking loans to fund expenses can quickly turn into a burden that pushes your personal and emotional aspirations for this new journey lower than your envisioned.

Keep things simple. Buy and spend on what you can afford and save for the rest. If you and your parents collectively or individually cannot afford to host too many people for a lavish wedding then skip it. Have a celebratory function after a court marriage or save for a year and have a grand first anniversary celebration.

There is always a choice to be made on how much you want to spend; choose wisely because life continues even after the instant gratification of an immediate spend has fizzled out. Leading a balanced and simple life owning things and spending on what you can afford will ensure that you have the right building blocks in place.

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