Vacation loan: The new travel mantra for youngsters
For decades, Indian youngsters were raised on a familiar script: secure a stable job, save every rupee, buy a house and stash away gold for emergencies. Travel was seen as a rare indulgence, something to save up for rather than a necessity. But Gen Z is rewriting that narrative in real time. Instead of saving for a distant future, they are borrowing to live in the “now”.
A recent viral reel by finance creator Sarthak Ahuja, which garnered over 4.2 million views, brought this shift into sharp focus. “Gen Z would rather spend money on buying happiness today through experiences and status-driven consumer goods,” he said. The trend is reflected in data as well. Paisabazaar’s report How India Travels Using Holiday Loans Volume 2.0 highlights a significant rise in Indians using personal loans for travel, with 27 percent of borrowers using funds for vacations. Demand is largely driven by Tier 2 and Tier 3 cities at 71 percent, Gen Z borrowers at nearly 30 percent, and salaried private sector employees at 65 percent. Small ticket loans under ₹3 lakh are fuelling the growing “travel now, pay later” or TNPL shift.
Why the sudden shift?
Industry voices say the trend points to a broader change in priorities, where experiences have become a new marker of success. According to Jyoti Mayal, Chairperson, Tourism and Hospitality Skill Council, “Travel has transitioned from being an occasional indulgence to a lifestyle priority. Experiences are the new luxury, and travel remains one of the most valued investments for modern consumers.”
Mental health over bank balances
For many Gen Z travellers, borrowing for travel is less about showing off and more about emotional well-being.
Charu Chellani, a marketing professional from Gurugram, says her decision to prioritise travel came after years of postponing it in the name of financial “correctness”. “For me, travel has been about self-discovery and mental well-being. These were long-held aspirations that did not always align with my savings timeline,” she explained. “I took a solo trip to Vietnam in April 2023 and converted all my expenses, totalling ₹75,000, into an EMI for six months.”
That sentiment is echoed across Gen Z, many of whom view travel as a way to reset, reflect and cope with burnout early in their careers.
“Work started feeling overwhelming by the time I was 23,” says Neha Gupta, a content strategist from Bengaluru, who took a short-term loan of about ₹1.8 lakh at roughly 14 percent interest to travel through Vietnam.
Few platforms to check for such loans
Minimum age requirement is 21 years, with an average credit score of around 650.
TripMoney offers zero down payment options, interest starting at 0.74 percent per month, and loans ranging from ₹2,000 to ₹1 lakh.
Airtel Finance charges interest between 10 percent and 18 percent per annum, depending on credit score, income and loan amount.
IDFC First Bank offers loans of up to ₹10 lakh at interest rates starting from 9.99 percent per annum.
Kotak Mahindra Bank provides loans ranging from ₹50,000 to ₹35 lakh, with interest starting at 10.99 percent per annum.
Olyv offers instant online approval, interest starting from 1.5 percent per month, unsecured loans with no collateral, and flexible repayment tenures.
(Check individual websites for detailed terms and conditions.)
Borrowing responsibly
Experts advise keeping EMIs under 10 to 15 percent of monthly income and opting for shorter tenures even if the EMI is slightly higher. Borrowers should avoid stacking multiple BNPL or EMI plans at the same time and always check processing fees, interest rates after promotional periods and penalties for late payments.
To avoid falling into a debt trap, sustainable alternatives include using travel credit cards for miles or vouchers, or starting a dedicated travel fund or SIP with a nominal monthly amount.
(With inputs from financial expert Karan Arora)
Popular destinations based on travel loan amounts
If you are borrowing between ₹1 lakh and ₹1.8 lakh, Thailand and Bali are common choices, covering a five to six-day trip including flights, mid-range hotels and key experiences.
For loans between ₹80,000 and ₹1.2 lakh, Vietnam emerges as a strong option.
Borrowers taking ₹2.5 lakh to ₹3 lakh often head to Dubai. This range typically covers shopping, theme parks, premium hotels and short but intensive itineraries, especially for families.
If you are borrowing under ₹2 lakh for an international trip, Singapore and Malaysia are popular choices. These destinations work well for short-duration holidays, particularly for families and first-time international travellers.
Once loan amounts rise to between ₹3 lakh and ₹6 lakh, Europe enters the picture, with cities such as Paris and Barcelona appealing for longer stays or once-in-a-lifetime trips.
Domestic trips with smaller loans
Most domestic travel loans fall between ₹50,000 and ₹1.5 lakh.
Borrowing between ₹70,000 and ₹1.2 lakh often points to Goa, especially during December and January when hotel prices surge and villa stays become popular.
Loans between ₹60,000 and ₹1 lakh are frequently used for trips to Himachal Pradesh or Leh, particularly for adventure-led travel.
Borrowing between ₹1 lakh and ₹1.5 lakh for domestic travel often indicates trips to the Andaman Islands, where high flight fares and add-ons such as scuba diving make it one of the costliest destinations within India.
