Wanderlust on Credit : Why Travel Loans Are Booming in India
5 mins read 14th Aug 2025
In a striking shift in consumer behavior, travel has emerged as the top reason for taking personal loans in India during the first half of 2025. According to a recent survey by Paisabazaar, nearly 30% of personal loans were taken to fund vacations—up from 21% in 2023. That’s not just a trend; it’s a cultural pivot.
The Emergence of the Leisure-First Consumer
What's behind this boost?
It's the digitally connected, aspirational young group—particularly Millennials and Gen Z—who are changing how India considers finance and leisure. These consumers find it acceptable to break up the cost of experiences.
Vacations have surpassed home improvement, debt consolidation, and even medical crises. It's a brash declaration of what this generation holds dear—and how they're choosing to pay for it.
Millennials Lead, Gen Z Accelerates
Millennials continue to reign supreme in the holiday-loan world, responsible for almost half of all travel-personal loans. But here is the surprise: the explosive rise of Gen Z, whose portion has doubled since 2023. For digital natives, traveling is not a treat—it's a way of life, and they are employing money tools to make it a reality.
Tier 2 & 3 Cities: The New Travel Hubs
Interesting to note is that travel loan demand is booming higher in Tier 2 and Tier 3 cities compared to the metros. This reflects a democratization of travel desires, where Tier 2 and Tier 3 cities are closing in on the large metros when it comes to lifestyle decisions and financial confidence.
What This Means for Lenders and Brands
This change presents new opportunities for:
- Fintechs and lenders to customize travel-specific loan products
- Travel businesses to provide EMI-based packages
- Marketers to capitalise on the emotional and aspirational value of travel
The word is out: India's youth are eager to discover the world—and they won't mind borrowing to do so.