Weddings in India have always been a thought-provoking affair and involve huge preparations. The effort that goes into the planning, right from fixing a venue to finalising catering end up making weddings a costly affair and sometimes all your savings are exhausted in making the wedding a successful event.
But, what if your savings are not enough and you need more funds? You may choose to borrow from friends or family members but you can’t be sure that they will be able to reach the budget for the wedding.
You may explore various other options like a personal or mortgage loan.
The latter is nothing but a loan against property. Here are a few reasons why a PNB Housing loan against property is your best option to fund a wedding:
If you have a property in your name, you can avail a loan against it and get an amount equivalent to 60% of the property’s value in present times. This can be beneficial as it allows you to borrow a higher amount against the property and you can plan a grand wedding just like you always wanted. You can mortgage an owned or rented house that is in your name, commercial property or even a piece of land.
When compared to unsecured loans like a personal loan, a loan against property can be availed with a lower interest rate ranging from 9.80% to 11.25%. This rate depends heavily on the type of property you are offering as collateral, its price in the present time, and your credit scores. A high credit score will fetch a lower interest rate and vice verse. Same with the loan tenure.
Top-Up On Existing Loan
If the property you own already has a loan on it with a lender, you can contact the lender and ask for a top-up amount or an additional loan to fund the wedding requirements. If the lender finds that you can repay this additional amount along with your existing EMI of the loan on the property whose price is on the rise, they can offer you a top-up loan.
Lender Procedures For Loan Disbursal
Every bank has its own procedure that they follow before clearing loan requests. There are slight variations but broadly they follow the same steps. Banks ensure due checks and verification, confirm ownership details of properties, collateral, valuation and prospects of the property. They then check on the repayment capabilities of the borrower and once that is confirmed, they approve the loan. This process usually takes about 15 – 30 days to complete, which is why it is important that if you are looking to avail a loan you should start early. Also, keep in mind that banks charge a processing fee of about 1%.
Make sure you weigh out all the pros and cons before you apply for a mortgage loan to fund your wedding. And don’t exceed your budget simply because you get a higher amount approved; remember you eventually have to pay the loan back, and your other expenses will be high too.