The way people take out loans has evolved. Loans are now available for various purposes, making it easier to access funding.
Previously, individuals had to visit multiple banks to secure a home loan. However, banks have recognized the demand for home loans and streamlined the process.
With the growing number of people seeking car loans, banks have made vehicle loans more accessible by appointing showroom representatives.
Loans are also offered for home repairs, modernization, and personal emergencies, such as higher education, albeit at slightly higher interest rates.
Now, individuals can even take out loans for holiday travel, known as “travel loans.” Interestingly, there is a higher demand for these loans in non-metro cities compared to towns and metro cities.
Online surveys have revealed that two out of five individuals take personal loans for tours and vacations.
There has been a significant shift in people’s preferences, with more individuals wanting to explore new places and natural beauty.
Taking a travel loan has become a popular trend, particularly among residents of semi-urban and non-metro cities.
The loan limit allows for travel within the country and abroad. A recent survey indicated that 68% of non-metro city residents have withdrawn travel loans.
Previously, people used to save money for trips, often traveling on a tight budget. However, a desire for quality transportation, accommodation, and other facilities during holiday tours leads individuals to opt for personal loans to finance these experiences.
Of those who took personal loans for holiday tours, 73% chose domestic tourist destinations, while 27% opted for foreign tourist destinations. Popular foreign destinations include Dubai (28%), Thailand (15%), and Europe (10%).
In the country, Goa (23%), Himachal Pradesh (10%), Uttarakhand (9%), and Jammu and Kashmir (9%) are preferred holiday destinations.
By the end of 2023, the percentage of individuals taking personal loans for travel reached at least 21%. The highest uptake was between April and June (27%), followed by June and September (16%).
Among those who availed holiday tour loans, 74% were employees, while 26% were professionals and self-employed individuals.
Financial institutions are offering special travel packages, such as “Holiday First and Pay Later,” and have entered into agreements with non-banking finance companies to provide diverse loan schemes, which has piqued the interest of more borrowers.