Personal Loans: 5 Key Tips for Financing Your Wedding

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If you’re looking forward to hosting a wedding, it’s crucial to arrange wedding funds first. There are several ways to do this. First, you should tap into your savings and investments to pay for your wedding. If this amount is insufficient, you can always raise a personal loan from a bank or financial institution. This is a fairly acceptable way to pay for a wedding.

However, one should remember that only a small portion of the money should be taken as a personal loan. For example, if your total wedding cost is approximately $1 million, your savings are equivalent to $700,000, then increase the personal loan to $Three hundred thousand.

However, if your wedding costs approx. $1 million, and your savings are only $200,000, then it is not recommended to raise such a high-value personal loan.

So, what can you do?

Wealth advisors recommend asking friends and family for interest-free loans, especially if you’re confident you’ll be able to repay the loan within a short period of time. If the financial aid from your friends is not enough, then only you can rely on a personal loan.

Preeti Zende, Founder, Apna Dhan Financial Services says, “If help from family or friends is not enough and you have room to accommodate fresh loan EMIs, then you should apply for a personal loan.” These are some of the keys you can follow while arranging funds for your wedding hint.

Here are five key tips to follow

1. debt funds: Since weddings are usually scheduled after a few years, you can invest your money in debt mutual funds. These funds are safe and secure, providing investors with guaranteed returns.

2. Time deposit: Just like debt mutual funds, fixed deposits (FDs) are also safe and secure. You just invest and earn a small amount of interest, which at least helps you beat inflation.

This is useful when you’re closer to your financial goals (which means a wedding is planned in a year or so). A person can earn 6% to 7% interest every year by depositing a fixed deposit in a bank.

3. Hybrid Fund: YesYou can also consider the prospect of investing in commingled mutual funds, especially if your wedding is planned to take place some time later (i.e., a few years from now).

“When you start making money, you need to set up a fund for short-term goals including a wedding. One can invest in large commingled funds to save for a wedding. Also, if savings are not enough, you can raise personal funds and a loan is the last resort means.

4. Stock funds: You might also consider investing in equity mutual funds, especially large-cap (or blue-chip) funds, as they don’t face high volatility and therefore are safer investments. However, equity is a better option when the financial goal (i.e. the wedding) is some time away.

5. Personal loan: As mentioned above, when there are no other options, one can explore the idea of ​​raising a personal loan. But it is recommended to look for the lowest interest rate possible. You can get a personal loan with a low interest rate only after comparing the different interest rates offered by multiple financial institutions.

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