The Guide To A Millennial Wedding: Marry Now; Pay Later

It would be a beautiful affair, somewhere in the Doon valley where he stays, or in one of the many hill stations that encircle it. He would marry in the winter, dressed in a high-end designer brand.

Fast forward to 2021, he is engaged and all set to marry.

Inflation in luxury fashion may have risen even more than India's fuel prices but he still wants the wedding of his dreams.

Even if it means taking a wedding loan.

"A career first and then the pandemic has reinforced the importance of mindful spending," he says, "but it does not have to be at the expense of that dream."

While many movies and fairy tales end with a fairytale wedding, few show you the bill.

Weddings can cost as little or as lot as you want. But sometimes ‘lot’ can really be a ‘lot’.

Not just for the wedding, even the proposal leading up to it.

A hotel of the #Nickyanka wedding fame charges as much as Rs 2 lakh for it's 'proposal package' that comes with serenading musicians, a butler service and a red carpet lined with candles and flowers leading to the decorated portico at the centre of the palace lawns.

If you are lucky, a few peacocks may be strutting around the lawn. But no, the cost of the package does not include the ring. That's on you.

As you ponder the costs and imagine yourself purposefully walking up to the wedding mandap, you may first have to find your way to a lender.

Loans or credit for weddings may not be new. You’ll recall a number of movies and television serials where families had to take informal credit for the marriage of their children.

"Do you happen to have a wedding wishlist? The perfect location, that oh-so-gorgeous ring, mouth-watering food, a dreamy decor and the nicely-matched wedding outfits, among other things?" asks the page dedicated to marriage loans on the HDFC portal.

"A marriage today comes with its fair share of frills, thrills and not to mention - Bills," Tata Capital says in its pitch for wedding loans.

"Don't let money be a constraint when it comes to planning your dream wedding", the page on Bajaj Finserv for personal loans for weddings reads.

Hotels are getting in on the act as well. "Marry now, Pay later" screamed a now viral advertisement from Royal Orchid hotels.

The marketing appears to be working.

According to a recent youth loan trends study conducted by IndiaLends — a digital lending platform, wedding loans constituted 33% of all loan requirements during the second wave of the pandemic compared to 22% during the first wave. Wedding loans were the largest segment of borrowings.

This surge in applications for wedding loans was owing to a year-long delay in their wedding plans brought about by the pandemic, according to the study, conducted among both salaried and self-employed youngsters aged between 20-35 between August 2020-March 2021 and April 2021-July 2021

Just like wedding finery transforms a person for a day, marketing has transformed plain, vanilla personal loans into a category in itself - ‘marriage loan’.

The nature of the product is essentially a personal loan which may have some extra benefits thrown in. You might be able to add a co-borrower, which permits you to borrow more than you might have on your salary, Pankaj Bansal, chief business officer at BankBazaar says.

Interest rates for a marriage loan are in line with personal loan rates, with tenor ranging between 12- 60 months.

Marriage loans are popular on peer-to-peer lending sites as well.

While there was some obvious slowdown in traction for wedding loans in the first lockdown for some months and in the second lockdown for a much briefer period, it is back to business as usual now, said Bhavin Patel, CEO and founder of P2P lender LenDenClub. The segment continues to pick-up and is expected to outperform in the coming months.

Weddings were and still remain in the top three categories that people take loans for, Deepak Mendiratta, head of risk at PayU said. "The loans are for legitimate reasons such as planned spending on jewellery or on clothing," he says.

The ticket size of a wedding loan is usually small and under ten lakhs, says Sanna Vohra, founder and CEO of the Wedding Brigade.

Also, more recently, couples are uncomfortable exhausting their savings on the wedding, Vohra says. "Instead, they are choosing to make use of more financing options such as taking a loan."

To be sure, the overall spending on a wedding has definitely declined as weddings are smaller on account of the pandemic. But, that can change when the wedding season returns, as long as restrictions don't come back too.

A wedding is a large life event, said Mendiratta. It's reason to go all-out. The change in borrowing philosophy of the younger generation adds to that.

Millennials today want to live life in the moment, says Patel. If they are able to live large, without that much of an additional burden, they don't see the harm in doing so, he says.

What we are seeing is that millennials are not averse to taking loans, whether it be for asset-creation or for more immediate needs, says Ambuj Chandna, president- consumer assets at Kotak Mahindra Bank.

Apart from the spending on the wedding itself, a couple can borrow for a honeymoon to the Maldives or home renovations for after, Bansal says.

For now, bankers are happy to give their blessings.

"Millennials are credit conscious and disciplined in their approach, understand the importance of building a credit history", Chandna says.