This shift has pushed holiday-related borrowing ahead of home renovation, which dropped to 24% from 31% over the same period.
The insights are based on responses from over 5,700 users across 97 Indian cities and towns. The data highlights a growing appetite for leisure travel among younger and non-metro borrowers.
“We are seeing consumers becoming increasingly comfortable and confident in using credit to meet aspirations and lifestyle needs, and the rise in holiday loans reflects this shift,” said Santosh Agarwal, CEO, Paisabazaar.
Tier-2 and tier-3 cities take the lead
The trend is particularly strong in smaller cities, with 71% of holiday loan borrowers in the first half of 2025 coming from tier-2 and tier-3 locations, up from 68% in 2023. Cities such as Lucknow, Surat, Jaipur, Patna, and Durgapur emerged as top contributors outside the metros. The share of tier-1 cities in holiday loan uptake fell to 29%.
Among metros, Delhi led with a 35% share, followed by Hyderabad (18%), Mumbai (15%), and Bengaluru (14%).
Gen Z and smaller loans driving uptake
Borrowers aged 20-30 (Gen Z) accounted for 29% of the holiday loans in first half of 2025, up from just 14% two years ago. Millennials (30-40 age group) remained the largest segment, making up 47% of borrowers.
The report also points to a growing preference for smaller loan amounts. Loans between ₹1-3 lakh accounted for 30% of holiday borrowings in 2025 (up from 13% in 2023). Meanwhile, loans between ₹50,000 and ₹1 lakh grew from 12% to 20%, and those under ₹50,000 jumped from 2% to 15%.
Private salaried borrowers dominate
Private sector employees continued to dominate the borrower pool, accounting for 65% in both 2023 and 2025. Business owners’ share rose to 17%, while self-employed professionals and government employees accounted for 12% and 6%, respectively.
When and where are Indians travelling?
Loan disbursals peaked during January, May, and June — collectively accounting for 60% of all holiday loans in 2025. January alone contributed 21%, suggesting a preference for winter or new year getaways.
Among destinations, Goa (18%), Kashmir (16%), and Himachal Pradesh (14%) were the top domestic choices. For international travel, South East Asia led with 44% preference, followed by the Middle East at 32%.
