Travel overtakes medical and home loans as India’s top borrowing reason
Travel is now the top reason for personal loans in India, driven by millennials and Gen Z. Tier-2 and 3 cities lead demand, reflecting a mass shift toward aspirational, experience-led spending.
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Travel has officially become the No. 1 reason for taking personal loans, surpassing traditional categories like home renovation and medical emergencies, reveals a report by Paisabazaar. The report highlights a striking shift in how Indians are choosing to borrow.
In the first half of 2025, 27% of borrowers took loans to fund holidays, up from 21% in 2023, marking a cultural pivot toward aspirational consumption.
This rise coincides with India’s booming travel ecosystem. Over 3 crore Indians flew abroad in FY24, and RBI data shows foreign travel spending touched $17 billion in FY25, accounting for nearly 60% of all outward remittances.
While millennials still make up the bulk of holiday-loan borrowers, Gen Z is the fastest-growing segment, with their share more than doubling to 29% since 2023. The report highlights a new class of digitally fluent, experience-first consumers who are comfortable turning wanderlust into manageable EMIs.
What’s more, this is no longer just a metro trend. Tier-2 and tier-3 cities now drive 71% of all travel loan applications, signaling a mass-market shift where vacationing and borrowing to do so, is becoming the new normal across India.
