How Much Do Weddings Cost These Days?

Wedding planner WedMeGood estimates that the average wedding budget has surged to Rs 36.5 lakh this year, with destination weddings averaging Rs 51 lakh.

Kindly note the image has been posted only for representational purposes.
IMAGE: Sobhita Dhulipala and Naga Chaitanya at their December 4, 2024 wedding. Photograph: Kind courtesy Nagarjuna/X

Indian weddings are synonymous with grandeur, but for an increasing number of millennials and Gen Z couples, financing that perfect day now involves more than just family support.

Many are turning to personal loans to fund Bollywood-style functions and destination weddings, driven by the desire to create Instagram-worthy moments without burdening their parents.

An IndiaLends survey of 1,200 millennials across 20 cities found that 42 per cent plan to self-fund their wedding.

Of these, 41 per cent intend to dip into their savings, 26 per cent are considering personal loans, and the remaining 33 per cent are undecided, shows IndiaLends Wedding Spends Report 2.0.

Among those who plan to borrow, 68 per cent expect to draw loans ranging from Rs 1 lakh to Rs 5 lakh, finds the report, which is based on data collected between October and November 2023.

A key reason behind this trend is the rising cost of weddings.

Wedding planner WedMeGood estimates that the average wedding budget has surged to Rs 36.5 lakh this year, with destination weddings averaging Rs 51 lakh -- both figures representing a 7 per cent increase over 2023.

Factors such as higher venue and catering costs, which have grown by 10 per cent, are driving these increases.

For many young couples, borrowing money is becoming a solution to bridge the affordability gap.

The demand for loans -- both by the couple-to-be and their families -- has not gone unnoticed by financial institutions.

Matrimony.com recently launched WeddingLoan.com, a fintech platform dedicated to wedding loans, partnering with IDFC, Tata Capital, and L&T Finance.

"Our research found that 25 to 30 per cent of unsecured personal loans are taken for weddings. In the past two years, this demand has grown by 20 per cent," says Mayank Jha, vice-president of Matrimony.com.

One of the main attractions of wedding loans is their accessibility.

Axis Bank, for instance, offers collateral-free loans. Arjun Chowdhry, group executive at Axis Bank, says they provide end-to-end digital disbursement and easy repayment options.

Marriage

WeddingLoan.com offers three categories of loans: Overdraft facilities, personal loans, and revolving credit lines.

Overdraft facilities linked to current or savings accounts are an option for those needing extra cash flow to manage fluctuating wedding expenses when the exact amount is uncertain.

Personal loans, on the other hand, are unsecured loans that financial institutions provide based on factors such as employment history, repayment capacity, income, profession, and credit score.

While these loans are typically disbursed as lump sums, revolving credit facilities offer flexibility, allowing borrowers to access funds as needed within a pre-approved credit limit.

The repayment schedule for revolving credit is adjustable depending on the amount used.

"Individuals with a monthly income of Rs 15,000 can avail of these loans, which range from Rs 50,000 to Rs 40 lakh," says Chowdhry.

"Customers can also opt for pre-payment or part-payment with applicable charges."

Interest rates for wedding loans in India start from 10 per cent.

ICICI Bank offers loans ranging from Rs 50,000 to Rs 50 lakh, with interest rates beginning at 10.65 per cent per annum, and loan tenures spanning 12 to 72 months.

Axis Bank provides similar loans at an 11 per cent interest rate, with repayment terms between 12 and 84 months.

IDFC First Bank offers personal loans of up to Rs 1 crore, with interest rates starting at 10.75 per cent per annum and flexible repayment tenures of up to 84 months.

"Indians are increasingly aspirational and value experiential spending. Many customers, however, underestimate the costs involved, leading them to opt for loans to bridge the financial gap," says Jha.

He is of the view that as India's economy grows and consumers gain access to a wider range of experiences, the demand for wedding loans will only increase.

What's more, this demand is not limited to urban centres.

"Traditional borrowing from relatives or local moneylenders is being replaced by formal financial institutions, making wedding loans more prominent (in rural areas)," says Praveen Khandelwal, founder of the Confederation of All India Traders.

However, the reasons for borrowing differ across regions.

In urban areas, the trend is often fuelled by lavish weddings, social media influence, easier access to credit, and rising aspirations.

In contrast, smaller towns tend to see more modest loan amounts in line with local budgets.

"Cultural pride and peer pressure play a significant role in these areas," says Khandelwal.

Fuelling the trend further is the unprecedented wedding season, with 4.8 million weddings expected in November and December 2024 alone, up from 3.8 million last year, according to Motilal Oswal Wealth Management.

Big is getting bigger, and the loans are only adding to the pomp and show.

This year, the wedding industry is projected to generate Rs 6 trillion in revenue – up from Rs 4.7 trillion in 2023.

Vow factor

What people spend on weddings (in %)