Rise in Holiday Loans as Wanderlust Soars
A significant surge in holiday loans has been observed recently, as more people in India fulfill their wanderlust and travel dreams through credit. Traditionally, personal loans were mainly associated with essential expenses like medical emergencies, education, or home renovations. However, there’s a notable shift among the Indian youth who are now accessing credit to support their travel aspirations.
According to data from financial platform Paisabazaar, there has been a considerable increase in the demand for personal loans specifically aimed at funding vacations and travel-related experiences.
In the first quarter of the fiscal year 2023 (Q1 FY’23), 81% of respondents availed personal loans for domestic travel, while 19% used them for international vacations. Comparing this to the previous year, the trend is on a clear upward trajectory, with only 16% of respondents choosing personal loans for travel during the same period in Q1 FY’23.
Majority Prefers Domestic Travel: Study
Interestingly, Q2 FY’23 witnessed the most significant surge, with 27% of consumers utilizing personal loans to fund their vacations. The data revealed that almost half of those who opted for personal loans for travel in the past six months preferred either January or June, indicating a seasonal preference for holiday financing.
However, the trend took an interesting shift in the second quarter of the fiscal year 2024 (Q2 FY’24), with 69% of respondents utilizing personal loans for domestic vacations and 31% for international vacations. This marks a noteworthy increase in the number of individuals seeking credit for overseas travel, showcasing a burgeoning desire among Indian travelers to explore foreign destinations.
To delve deeper into this phenomenon, Paisabazaar’s research team conducted an extensive survey involving over 4000 respondents from 105 cities and towns. All respondents had availed personal loans from the Paisabazaar platform during the first half of 2023 (January to June). The objective was to understand the underlying needs and aspirations of those who turned to credit to materialize their holiday dreams.
Personal loans for travel
Surprisingly, 68% of respondents availing personal loans for travel came from non-metro cities, highlighting a growing trend of wanderlust among residents beyond major metropolitan areas. The 68% consumers represented 97 non-metro cities, including Patna, Kanpur, Vizag, Guwahati, and more, which presents a compelling case for inclusive growth in the travel financing sector.
Dubai and Goa emerged as the top choices among respondents who financed their vacations through personal loans. For international vacations, 28% of respondents headed to Dubai, followed by Thailand (15%) and Europe (10%). For domestic travel, 23% of respondents preferred Goa, followed by Himachal Pradesh (10%), Uttarakhand (9%), and Kashmir (9%).
Naveen Kukreja, Co-Founder & CEO of Paisabazaar, acknowledged the increasing confidence and comfort among consumers in accessing credit to fulfill their diverse aspirations, including travel. He emphasized the industry’s responsibility to facilitate seamless access to credit and meet the surging demand from various consumer segments.
As more individuals embark on their travel adventures, the financial sector is adapting to cater to the evolving needs of this travel-hungry nation, helping turn dreams into tangible realities, one personal loan at a time.
