Highest demand from small towns in taking personal loan for traveling

- 16% people took personal loans from January to March 2023. Which increased to 27 percent during April to June

Many Indians, especially those from small towns, take personal loans to renovate their homes or to go on vacations or travel. In fact, these types of loans are usually taken for important things like medical emergencies or your children's education, but in the first half of 2023 (January to June), at least 21% of people took personal loans for travel. In the first three months of 2023 (January to March), 16% took a personal loan for holidays. But in the next three months (April to June), this number rose to 27%, a survey found.

Between April and June, there was a big increase in the number of people taking out loans for overseas holidays compared to the previous three months. In the last 6 months, 73% of everyone who took a personal loan for a holiday used it for a holiday in the country and 27% used it for a trip abroad. After people who took out vacation loans, among the borrowers were people who refinanced other loans like credit card loans. Some even took loans to pay medical bills. The rest, which is 29%, used the loan to cover expenses related to marriage, education or business.

In the last quarter of FY23, the number of people taking personal loans from banks increased by 16.3% compared to the previous year. At the same time, money deposited by the public in banks grew at a slower rate of 10.2%. Many people who wanted a holiday loan were from cities that are not big. From January 1, 2023 to June 30, 2023, 68% of holiday loan borrowers were from small towns. These 68% came from 97 different non-metro cities.

In major cities like Mumbai, Bengaluru and Delhi, most personal loan borrowers used it for holidays within the country (77%), while a smaller percentage (23%) used it for traveling abroad. Mumbai (25%) has the highest number of holiday loan borrowers among metro cities, followed by Bengaluru (22%) and Delhi (20%).

The survey found that the majority of holiday loan borrowers were salaried. Between January and June 2023, 74% of holiday loan borrowers were salaried employees. Only 26% were self-employed professionals or industrialists.

January and June were the most popular months for people to avail holiday loans in the first half of 2023. During these months, most parts of the country have holidays in schools and colleges, so more people want to go on vacation. The highest number of people who took out a holiday loan in the last 6 months was in June (26%), followed by January (23%). Only 9% of holiday loans were taken in March, the lowest during the last financial year.

In January, 75% of holiday loans were used for domestic holidays and 25% for foreign trips. Loans for overseas travel increased by 36% in June due to the long summer holidays in schools and colleges. Dubai and Goa were the most popular destinations among people using holiday loans for holidays. 28% of borrowers went to Dubai for overseas holidays, followed by Thailand (15%) and Europe (10%) were the top destinations where people chose to travel using personal loans. 23% of holiday loan borrowers chose Goa as their preferred holiday destination. After Goa, the popular destinations were Himachal Pradesh (10%), Uttarakhand (9%) and Kashmir (9%).