Financial experts strongly recommend using savings for wedding expenses when possible, as reported by Mint. Yudhajit Baul, Founder of Yudhajit Financial Services Pvt Ltd, emphasizes the importance of planning ahead, stating that lack of financial preparation can cause family stress. He recommends starting early investments through SIP in equity mutual funds with an expected CAGR of 12.62%, where ₹10,000 monthly investments can grow to ₹8.23 lakh in 10 years. For parents planning children's weddings, he suggests making planned monthly investments for a decade in reputable mutual funds to compound wealth when the child reaches marriageable age.
The choice between savings and personal loans carries significant financial implications, according to Mint analysis. Using savings avoids interest costs and monthly repayments, while personal loans allow spreading expenses over several years but increase overall event costs. Kapil Makhija, COO of MinEMI, notes that wedding loans run 3-5 years compared to a single wedding day, with borrowers still paying EMIs for events long over. Interest rates on personal loans vary from 7.5% to 15%, while bank and established NBFC loans range 11-16%, with app loans above 20% being avoided.
The decision significantly affects long-term financial planning, as reported by Mint. Personal loan EMIs can reduce borrowing capacity and leave less money for investments, potentially delaying major financial goals like home loans, car loans, or building long-term savings. High interest rates can consume 30% of monthly income, making it difficult to save and invest for other life events. Experts recommend capping EMI payments at 10-15% of monthly income and avoiding borrowing from unestablished lenders.
Both options have distinct advantages regarding financial flexibility, according to Mint analysis. Using savings preserves emergency funds and leaves cash available for medical emergencies, unexpected expenses, or future life goals. However, depleting savings for wedding expenses can make managing immediate finances difficult. Personal loans provide immediate cash flow but require regular EMIs for 3-5 years, with missed payments damaging credit scores. The choice depends on individual savings levels, income capacity, and long-term economic objectives.
