Big Indian Weddings: 6 Tips for Managing Post-Wedding Debt in India

Weddings in India have turned into extravagant celebrations, often leading couples to seek significant financing. The wedding season is about to begin and this is when people start applying for wedding loans. This requires a well-thought-out decision to recognize and avoid predatory lending. Post-marriage debt can seem daunting, but with a solid strategy, it becomes more manageable.

Tips for Managing Wedding Debt

Create a debt repayment plan: Outline a clear plan to stay organized and focused on paying your debts.

Avoid new debt: Do not take out new loans or unnecessary expenses until your current debts are managed.

“Create a clear debt repayment plan and avoid taking out new loans until your current debts are managed. For multiple loans, consider the debt snowball method – paying off smaller debts first for quick wins – or the avalanche method debt management, which focuses on high-interest debt to save money over time. Choose the method that best motivates you, whether through small wins or minimizing interest payments,” advises Anand Agrawal, co-founder and CPTO at Credgenics. .

Choose a refund method

Consolidate high-interest loans: Consider consolidating your loans to reduce monthly payments.

Refinance debts: Look into refinancing to combine debts into a single loan with a lower interest rate for easier management.

“Consolidating high-interest loans can reduce your monthly payments. Consider balance transfer credit cards for reduced rates and refinance your debts into a single loan with a lower interest rate to simplify your finances,” advises Anand Agrawal.

Set up automatic payments

“Setting up automatic payments can help you avoid missed payments, late fees, and damage to your credit score. This proactive approach keeps you organized and allows you to focus on your new life together,” he added.

“Personal loans for weddings are increasingly common in India, where the wedding industry is valued at around $130 billion, making it the second largest in the world. Many are turning to personal loans to cover costs without depleting savings, a trend particularly popular among millennials who prefer this route, relying too much on parental support,” said an expert at CredNow.

Why you shouldn’t take out personal loans to finance your wedding

However, personal loans have disadvantages. Many lenders impose high fees and the monthly payments can be significant, leading many personal finance experts to advise against them. Personal loans typically have higher interest rates than secured loans, which increases the overall cost of the loan.

Although taking a personal loan for a wedding in India may be tempting, it can be a hasty choice. With average costs ranging from $$20 lakhs for $$5 million, many couples can become overwhelmed by debt, especially early in their marriage. Personal loans have high interest rates (10.5% to 24% per year) and short repayment terms (1 to 5 years), leading to significant monthly payments that can strain your finances. advises Siddharth Maurya, founder and managing director of Vibhavangal Anukulakara Private Limited.

A report by the Confederation of All India Traders (CAIT) estimates that India will host 3.5 million weddings between November and mid-December. According to Prabhudas Lilladher’s report, “Band, Baaja, Baarat and Markets”, the industry is expected to generate $$4.25 lakh crore in expenditure during this period. This represents a significant increase from last year’s 3.2 million weddings.

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Disclaimer: The opinions and recommendations made above are those of individual analysts, not Mint. We advise investors to consult certified experts before making any investment decision.