Millennials might be known for their carefree attitude seeking instant gratification, but when it comes to responsibility, they gladly take up the baton. In India, where weddings are a big fancy affair with parents’ major involvement in organising it, the “self-made” generation wants to fund it by themselves.
According to a report by fintech start-up IndiaLends, millennials accounted for 84 per cent of total wedding loan applications on its platform in 2019-20 even as they (borrowers in age group of 20-35) comprised 40 per cent in its customer mix. The quantum of the loan ranged between Rs 1.8 lakh to Rs 33 lakh, while the average stood at Rs 4 lakh.
“Comparing 2019-20 data with the previous year, IndiaLends reported a 30 per cent growth in personal loans for wedding purposes,” says the report.
Why are millenials borrowing to tie the knot? Because they don’t shy away from spending on experience. Madhur Bhatia, a 32-year old Delhi-based young professional says his friend had thrown a destination wedding in Jaipur, so he has to do the same or even better. “Budget is limited from the family side, and I earn well, so I don’t want to burden my family for the kind of wedding I want to plan,” he says.
Besides, easy availability of credit irrespective of credit history and seamless procedure makes it simpler to apply for the loan on fintech platforms and receive it.
“Digital lending platforms offer specialised wedding loans based on easy EMIs that are within the reach of salaried millennials. As they are earning well and loans are available at 10-14 per cent, they find it affordable to organise dream weddings,” says IndiaLends Founder and CEO Gaurav Chopra.
In regions, the metros saw an increase of 46 per cent with top cities such as NCR, Mumbai and Bengaluru recording the highest number of applications, the report says, while Tier-2 cities saw a growth of 18 per cent with cities such as Lucknow, Vizag, and Indore witnessing the highest rise.
The report also highlights that 42 per cent of all wedding loan applications came from women. Jewellery, wedding trousseau, destination wedding, honeymoon and venue & catering were the top reasons to get a wedding loan.
Another consumer lending start-up MoneyTap says family functions & weddings are among top three reasons to borrow on its platform. The first two include paying bills and medical emergencies. “Transaction-wise, the ticket size of the wedding loans is almost double the size of the average tickets. The ticket size for wedding loans is Rs 64,000 compared to average ticket size of Rs 35,000 overall,” says Bala Parthasarathy – CEO and Co-Founder, MoneyTap.
Parthasarathy agrees that women have been taking more wedding loans than men. “About 4.6 per cent of women borrow money for weddings, as opposed to 4 per cent of males,” he says. Delhi borrows the most for weddings followed by Kolkata, Bengaluru, Mumbai, Pune and Hyderabad, he adds.
While its commendable millenials don’t want to burden their parents with wedding expenses, they must be careful about how much loan they take at what interest rate. Funding the experience on loan is simple, but factor in nuances of repayments and consequences of late payments.