Traditionally, personal loans have been associated with need-based expenses like medical emergencies, higher education, or home renovations. However, a growing trend among the youth of India reflects a shift towards accessing credit to fulfill their wanderlust and travel aspirations.
The financial platform, Paisabazaar has recorded a surge in the demand for personal loans specifically aimed at funding vacations and travel-related experiences.
Among respondents who availed personal loans for vacations in Q1 FY’23, 81 per cent were for domestic travel, while 19 per cent were for foreign travel.
The percentage of consumers availing personal loans for vacations in the past six months (January – June) stood at 21 per cent. Comparing this with the previous year, the trend is on a clear upward trajectory, with only 16 per cent of respondents opting for personal loans for travel in the same period of Q1 FY’23, Paisabazaar research revealed.
Q2 FY’23 witnessed the most significant surge, with 27 per cent of consumers utilising personal loans to fund their vacations. Interestingly, almost half of the respondents who opted for personal loans for travel in the past six months did so either in January or June, indicating a seasonal preference for holiday financing.
However, the trend saw a significant shift in AMJ (Q2) FY’24, with 69 per cent of respondents utilising personal loans for domestic vacations and 31 per cent 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 embarked on an extensive survey. They interacted with over 4000 respondents from 105 cities and towns, all of whom had availed personal loans from the Paisabazaar platform during the first half of the year 2023 (January to June).
The objective was to understand the underlying needs and aspirations of those who turned to credit to materialise their holiday dreams.
68 per cent of respondents who availed personal loans for travel hailed from non-metro cities, signifying a rising trend of wanderlust among residents beyond the major metropolitan areas. These 68 per cent consumers represented an impressive 97 non-metro cities, including Patna, Kanpur, Vizag, Guwahati, and more, making a compelling case for inclusive growth in the travel financing sector.
Dubai’s Department of Economy and Tourism has ramped up its efforts to position Dubai as the preferred destination for Indian travellers. Through a series of B2B travel trade engagements, including roadshows, mega familiarisation trips, and trade workshops, DET captured the attention of travellers from various regions of India. This growth was aided by exceptional flight connectivity and a convenient visa process.
Dubai and Goa emerged as the top choices among respondents who financed their vacations through personal loans. 28 per cent of respondents who availed personal loans for international vacations headed to Dubai, followed by Thailand (15 per cent) and Europe (10 per cent). For domestic travel, 23 per cent of respondents chose Goa as their preferred destination, followed by Himachal Pradesh (10 per cent), Uttarakhand (9 per cent), and Kashmir (9 per cent).
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. Recognizing the positive impact on India’s inclusive growth agenda, Kukreja emphasised the industry’s responsibility to facilitate seamless access to credit and meet the surging demand from various consumer segments.
As more and more individuals embark on voyages, the financial sector is adapting to cater to the evolving needs of a travel-hungry nation, transforming dreams into tangible realities, one personal loan at a time.
