Loan for Festivals: How To Celebrate Big Without Regretting It Later

The festive season is a welcome change from the daily grind that is life. It's a time when families get together, honour and celebrate traditions, and more importantly, exchange gifts. On the flip side, the season also drives up your expenses, even if you try to stay disciplined.

While you can dip into your savings to cover the additional costs of gifts, travel, or the long-overdue home renovation before calling everyone over, a festive loan can be a smarter alternative. This blog will tell you everything you need to know about them.

What Are Festive Loans?

Festive loans are borrowing instruments that banks and financial institutions offer during specific festival seasons. They are, in essence, just personal loans, but with a few special features in light of the occasion, such as:

• Minimal or sometimes zero processing fees.
• Lower interest rates when compared to a standard personal loan.
• Minimal documentation with quicker approvals
• Flexible repayment options.

All of the above perks, of course, vary by lender (and your eligibility) and will be offered based on their discretion.

When Does Opting For A Festive Loan Make Sense?

Now, taking on additional debt should never be a casual decision, especially during festivals. These are occasions where almost everyone succumbs and makes impulse purchases. A festive loan is worth considering only when you:

• Want to take advantage of seasonal discounts
• Have a large planned expense coming up, such as a child's birthday or an anniversary
• Plan to make a few home improvement upgrades and prefer to spread out the payments over time

Consider the average family whose breadwinners are in their 50s (The same example will apply to younger families, too). This is a time when their focus is on building their retirement corpus. Dipping into retirement funds or breaking a few key long-term investments at this stage for a big expense will not be the right move.

Taking on a festive loan, however, will help cover that expense over multiple EMIs. Using a personal loan eligibility calculator will tell them exactly how much they can borrow and what their monthly payments will look like.

Are You Ready To Take A Festive Loan?

As tempting as getting something for you and your family on a special occasion is, the sensible move is to accurately assess if you are in a position to take on additional debt. Here is a checklist to help you decide if you are ready for a festive loan and the right way to do so.

To decide if you are ready for a festive loan:

• Review your EMI-to-income ratio: Make sure that all your EMIs combined, including the festive loan, do not add up to more than 40 to 45% of your net monthly income. Anything beyond this, and you will be seen as a high-risk borrower by lenders.
• Take into account upcoming expenses: Check if you have any forthcoming critical expenditures that trump the impulse of a festive loan, like insurance renewals or your child's semester fees. List all of them out for better clarity.
• Verify your credit score: Check and verify your credit score. The higher the interest rate, the better the terms of your loan. If you do see any discrepancies, get them sorted before you apply for this loan.

How To Borrow Smartly?

If you determine that you can take on a festive loan, here are a few points to consider to make sure that you are borrowing smartly:

• Avoid over-borrowing: Borrow only what you need and not what you are eligible for
• Balance your tenure and your ability to pay EMIs: While it can be tempting to choose a longer tenure to reduce your EMI, you also end up paying more in interest over time. Take your time on this one.

Fulfil your festive needs with Hero Fincorp's festive loans

The festive season should be all about joy, togetherness, and shared experience, and never a source of lingering financial stress. By planning your festive spending wisely and borrowing only when it truly makes financial sense, you can celebrate without putting unnecessary strain on your budget.

If you decide that a festive loan is the right choice, start by checking your personal loan eligibility with Hero FinCorp. The festive loan options come with flexible repayment terms and competitive rates to suit your needs.

Frequently Asked Questions

1. Can I get a personal loan approved before the festive season starts?

Festive loans are seasonal, so you can apply for them as soon as banks start offering them. Dispersals are usually quick, especially if you apply through an instant personal loan app and meet all eligibility criteria.

2. What expenses can I cover with a festive loan?

A festive loan is essentially a personal loan, so there are no restrictions on how you spend the money. That said, it's best used for specific "planned" festival-related expenses. Never turn to personal loans for impulse buys.

3. Can I prepay my festive loan?

Yes, you can; festive loans can be prepaid, and more often do not come with any prepayment charges either. However, always review the terms and conditions carefully, as they vary from lender to lender.

4. Is there a minimum salary requirement for festive loans?

Yes, there is. Hero FinCorp generally offers personal loans to salaried individuals earning at least ₹15,000 per month.