27% of personal loan borrowers in H1 2025 used credit to fund vacations, outpacing home renovations; Tier-2 cities and young consumers drive demand
Gurgaon | August 4, 2025: Indian consumers are increasingly turning to personal loans to fulfil their travel dreams, according to Paisabazaar’s latest consumer insights report, How India Travels Using Holiday Loans (Vol. 2.0). The report reveals that 27% of personal loan borrowers in the first half of 2025 used their loans for vacations—up from 21% in the same period of 2023—making holidays the second-most popular loan category, ahead of home renovations.
The findings, based on a survey of over 5,700 respondents from 97 cities and towns, point to a strong rise in the use of credit to support lifestyle aspirations. Notably, 71% of holiday loan borrowers were from Tier-2 and Tier-3 cities, with major contributions from Lucknow, Jaipur, Surat, Patna, and Durgapur. In contrast, Tier-1 city borrowers accounted for just 29%, down from 32% in 2023.
Commenting on the trend, Santosh Agarwal, CEO of Paisabazaar, said, “We are witnessing a cultural shift where consumers feel more confident in using credit to fulfil their aspirations. Holiday loans are a clear reflection of this evolving mindset. Our report aims to provide a deeper understanding of how different consumer segments are approaching travel financing, helping us continue to deliver informed choices and tailored solutions to every Indian.”
Among metro cities, Delhi led the pack, accounting for 35% of holiday loans from Tier-1 cities, followed by Hyderabad (18%), Mumbai (15%), and Bangalore (14%). Gen Z consumers (aged 20–30) are increasingly using credit to travel, with their share rising to 29% in 2025 from 14% in 2023. Millennials (30–40 years old) remained the largest borrower group at 47%.
The report also highlights a growing preference for smaller loan sizes. In H1 2025, 30% of holiday loans were in the ₹1–3 lakh range (up from 13% in 2023), while loans under ₹1 lakh saw sharp growth. This trend reflects a shift toward short-haul vacations and budget-friendly financing.
Private salaried employees continued to dominate the segment, making up 65% of borrowers, followed by business owners (17%), self-employed professionals (12%), and government employees (6%). Peak demand for holiday loans occurred in January, May, and June—with January alone accounting for 21% of total disbursals.
In terms of destinations, Goa topped the domestic travel list with 18% preference, followed by Kashmir (16%) and Himachal Pradesh (14%). For international travel, Southeast Asia was the most popular (44%), followed by the Middle East (32%).
The report reflects India’s evolving relationship with credit and its growing inclination to prioritize experiences through flexible financing.
About Paisabazaar
Paisabazaar.com is India’s leading marketplace for loans and credit cards. With a mission to democratize access to credit, Paisabazaar offers consumers a wide choice of financial products, seamless digital journeys, and trusted advice to make informed financial decisions.
