{"id":371176,"date":"2023-11-21T14:42:12","date_gmt":"2023-11-21T09:12:12","guid":{"rendered":"https:\/\/zerodha.com\/z-connect\/?p=371176"},"modified":"2024-02-13T14:51:16","modified_gmt":"2024-02-13T09:21:16","slug":"the-dark-side-of-the-big-fat-indian-wedding","status":"publish","type":"post","link":"https:\/\/zerodha.com\/z-connect\/varsity\/the-dark-side-of-the-big-fat-indian-wedding","title":{"rendered":"The Dark Side of the Big Fat Indian Wedding"},"content":{"rendered":"

Beti ki shadi se bada baap ka kya farz hota hai?<\/em><\/p>\n

A father\u2019s biggest duty is his daughter\u2019s wedding.<\/em><\/p>\n

Two fathers, one spending \u20b92.5 Cr and the other spending \u20b96 lacs on their respective daughters\u2019 weddings, make this statement in an episode of Made in Heaven on Prime Video.<\/p>\n

The show is about big fat Indian weddings. But it is the reality of our lives. Nearly everyone wants a colossal, dreamy wedding for themselves and their children. Many spend their life\u2019s savings on a wedding. Those who cannot afford it may be willing to borrow for it.<\/p>\n

For example, the staff at my father\u2019s hotel, most of whom come from marginal backgrounds, generally spend about 8-10 times their annual salary on their wedding. Some of them do not have the means, so they borrow. A wedding is usually the biggest celebration in their lives. So, they are happy to borrow.<\/p>\n

Marriage loans are a big market in India. Lenders often advertise dream weddings to lure people into borrowing. Ads on television and social media depict a sense of comfort and empowerment in taking such loans.<\/p>\n

\u201cWedding expenses are running high? Don\u2019t worry when you can take a marriage loan in a few clicks!\u201d<\/em><\/p>\n

\u201cThe daughter is getting married. So what if the lehenga is a little expensive? Your bank is with you.\u201d<\/em><\/p>\n

There is no discussion of the payback terms. No mention of interest rate and tenure. Only the feel-good and convenient parts of the loans are advertised.<\/p>\n

And lenders spend heavily on maintaining a good narrative and ensuring that loans are offered to you whenever you search for them.<\/p>\n

A simple Google search of \u201cmarriage loans\u201d shows hundreds of platforms from where you could borrow. All premiere banks, NBFCs, and lending platforms feature in Google\u2019s top hits. If you search \u201cmarriage loan problems,\u201d the top hits are still loan offers or posts on \u201cWhy should you consider a marriage loan?\u201d and \u201cHow is it good for you?\u201d.<\/p>\n

A\u00a0survey<\/a>\u00a0by IndiaLends in 2019 suggested that 20% of all loan applications received from young Indians aged 20-30 years in 2018-19 were for marriage. About 19% of this population wanted loans for travel purposes and 11% for lifestyle-related uses. Only 11% wanted loans for starting up their business.<\/p>\n

Another\u00a0survey<\/a>\u00a0by IndiaLends timed around the second wave of Covid, that is, roughly around the first half of 2021, suggested the average ticket size for marriage loans was the highest at \u20b94.13 lakh, followed by medical expenses at \u20b94 lakh, household expenses at \u20b93.43 lakh, and for business at \u20b92.62 lakh.<\/p>\n

Typically, you could borrow anywhere between \u20b910,000 and \u20b940 lakh as a marriage loan. Interest rates could vary from 10.5% to 37% per annum. Loan tenures range from 3 months to 5 years.<\/p>\n

Taking loans to build an asset that you could use or monetize for years is understandable. Some personal finance experts might even encourage you to take such loans. But marriage, although a once-in-a-lifetime event for most\u201d, is an expense. The longing to create one dreamy, colossal day could cripple your personal finance for years to come. It could mean delaying your other goals or starting a family.<\/p>\n

So, why do people take marriage loans? In most cases, the older generation took marriage loans to affirm their social standing. Today\u2019s generation is doing it to keep up with the social media personas they have built.<\/p>\n

This reminds me of a quote by Morgan Housel, one of the greatest thinkers of our times in the world of finance, in his book Psychology of Money \u2013 Spending money to show how much money you have is the fastest way to have less money.<\/p>\n

I rang up a few friends who work in some major banks to understand more about the marriage loan scene in India. Here are a few takeaways:<\/p>\n