Indians' Growing Appetite for Credit-Funded Leisure

Recent studies highlight a significant shift in the borrowing habits of Indians, with vacations now leading as the primary reason for taking personal loans, surpassing home renovations and medical expenses.

Key Findings from the Paisabazaar Report

A comprehensive survey of over 5,700 respondents across 97 cities reveals that 27% of borrowers in the first half of 2025 took loans to fund vacations, up from 21% two years prior. This trend places travel ahead of other loan purposes such as home improvements (24%), credit card repayments (11%), and medical expenses (9.6%).

The Demographic Shift in Borrowing

Millennials dominate the holiday-loan market, comprising nearly half of all borrowers. However, the fastest growth is observed among Gen Z, whose share has more than doubled since 2023, reaching 29%. This shift is attributed to a digitally savvy, aspirational consumer base eager to finance their leisure activities.

Changing Geographic Patterns

The demand for travel loans is not just confined to India's metropolitan areas. Tier-2 and tier-3 cities accounted for 71% of loan applications in early 2025, indicating a broader national trend towards leisure travel.