Travel loans overtake house renovation, medical: Study

MUMBAI: The appetite of Indians for credit-funded leisure is growing. Holidays have overtaken home renovations and medical needs as the leading reason for taking personal loans.

A Paisabazaar report, based on a survey of over 5,700 respondents in 97 cities, finds that in the first half of 2025, 27% borrowers took a loan to fund a vacation, up from 21% two years earlier. That puts travel ahead of home improvements (24%), credit card repayments (11%), medical expenses (9.6%), education (6.1%) and weddings (5.4%). According to Santosh Agarwal, the firm's chief executive, the figures reflect a growing willingness to use credit for lifestyle goals.

The shift is part of a broader surge in travel. Govt data show that more than 3 crore Indians travelled abroad in FY24, with numbers climbing further in FY25. On spending, RBI's data indicate that Indians spent about $17 billion on foreign travel in FY25 - accounting for 57-60% of all outward remittances during the year. Millennials remain the largest cohort of holiday-loan borrowers, making up nearly half the total. But the fastest growth is among Gen Z - their share has more than doubled since 2023, to 29%.

The report attributes this to a 'new-age' consumer base - digitally adept, aspirational, and willing to spread the cost of leisure.

Demand is also shifting away from India's biggest cities, with tier-2 and tier-3 centres accounting for 71% of the applications in early 2025.


Ready to Make a Smarter Property Decision? Build Your Legacy with TOI Homes.