A recent consumer-survey reveals that 27% of Indians used personal loans to finance holidays between April and June 2025, marking a growing shift toward credit-driven leisure travel. Millennials and Gen Z dominate this trend, with Gen Z’s share rising from 14% in early 2023 to 29% by H1 2025. Private salaried individuals make up about 65% of holiday loan borrowers.

Many borrowers—especially from non-metro cities (68%) across 97 towns—opted for domestic trips (73%), while roughly 27% funded international travel destinations like Dubai, Thailand, and Europe.

While holiday loans allow travelers to fulfil dream vacations, they come with high interest rates typically ranging from 10% to 20% per annum. A ₹1 lakh loan at 15% interest over three years could accumulate over ₹1.3 lakh due to interest alone. This can erode financial discipline and increase debt burden, especially alongside other EMIs.

The rise of holiday loans has made travel the top reason for personal borrowing in 2025, even overtaking personal loans for home makeovers.

While borrowing for vacations reflects changing aspirations, financial advisors urge caution. It’s crucial to evaluate affordability, compare lenders, and consider whether spending upfront is worth long-term cost. Holiday dreams shouldn’t become lingering debt regrets.