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Summary: A 2025 consumer insights report by Paisabazaar reveals an eye-catching trend: nearly 47 per cent of all holiday loan applicants fall in the 30–40 age group. In other words, the 30-somethings are borrowing more to fund their trips. So, are they just splurging irresponsibly, or is something deeper at play? We break down the hidden risks of holiday loans, and show you a smarter way to travel debt-free (yes, it’s totally doable).
A 2025 consumer insights report by Paisabazaar reveals an eye-catching trend: nearly 47 per cent of all holiday loan applicants fall in the 30-40 age group. In other words, the 30-somethings are borrowing more to fund their trips.
So, are they just splurging irresponsibly, or is something deeper at play?
We break down the hidden risks of holiday loans, and show you a smarter way to travel debt-free (yes, it’s totally doable).
Why is this age group taking out holiday loans?
- YOLO meets FOMO: The desire to travel often stems from a 'you only live once' attitude, further fuelled by picture-perfect holidays flooding social media feeds.
- Earnings boost, lifestyle creep: Many in this age group have reached a career phase where their salaries have seen meaningful jumps, but so have their lifestyle expectations.
- Delayed gratification fatigue: Since many in this age group have "serious" goals like home EMIs, kids' education or even retirement planning, a short escape or a mental health break feel like a well-earned vacation.
- The illusion of salary growth: At first glance, it may seem like professionals today are earning more than they were a decade ago. But a recent Marcellus Investment Managers analysis revealed a sobering truth: between FY16 and FY24, real salary growth in Nifty 50 companies actually declined. Perhaps, that’s why many professionals in their 30s don’t always have the surplus cash for an impromptu trip. With EMIs, childcare costs, lifestyle expenses and now the creeping bite of inflation, a hastily planned holiday often pushes them toward credit. If that’s the case, the spurt in taking out travel loans isn’t an example of extravagance, it's simply a case of overestimating how much breathing room their salary actually gives them.
- Easy access to credit: Digital lending apps, buy-now-pay-later schemes and pre-approved personal loans have made it easier than ever to borrow for a holiday in just a few clicks.
But here’s the fine print most ignore until it's too late.
What are the hidden costs of borrowed holidays?
1. High interest rates
Holiday loans are unsecured, meaning there’s no collateral. So, to cover their risk, lenders charge high interest rates. So, that dreamy trip to Italy you thought cost Rs 2 lakh? It could end up costing you Rs 2.5-3 lakh by the time you're done repaying the EMIs.
2. EMIs eat into future freedom
What seems like “easy” money today becomes a monthly burden tomorrow. Add this to your existing EMIs (education loan, car, credit card), and your future self may feel cornered, especially if an emergency crops up.
3. No lasting asset
Loans make sense when they help you build something, like a house, a degree or a business. But here, once the vacation is over, all you're left with are memories and EMIs.
4. Risk to your credit score
Miss a single EMI, maybe because of a job loss or an emergency, and it dents your credit score. That in turn affects your ability to get future loans at better interest rates.
Is there a smarter way to travel?
At Value Research, we’re not here to rain on your beach plans. In fact, we want you to travel, without guilt or debt. And you can do it with a little planning and a Systematic Investment Plan (SIP).
Here’s how:
Step 1: Set a realistic goal
Estimate the full cost of your holiday. Flights, stay, food, activities and a buffer for last-minute surprises.
Step 2: Start a dedicated fund
Open a separate account or, better yet, start an SIP in a short-duration debt mutual fund. For goals one to three years away, these funds offer better returns than FDs or savings accounts, without exposing you to equity market risk.
Step 3: Automate it
Suppose your trip will cost Rs 1.2 lakh next year. Set up a monthly SIP of Rs 10,000. You won’t feel the pinch, and your money grows quietly in the background. In fact, you may end up with a slightly higher amount in a year’s time, as short-duration debt funds have proven time and again, with them yielding 8.4 per cent returns in the last 12 months. Over three years, these same funds gave 7.3 per cent returns.
Step 4: Top it up with small wins
Got cashback from a credit card? Sold unused gadgets? Skipped a few Zomato orders? Funnel all that into your travel fund. It adds up faster than you think.
Final word
Holidays should leave you with joy and memories, not EMIs and regret. While instant gratification is tempting, the peace of mind that comes with a fully-paid vacation is unbeatable.
So before you click ‘Apply Now’ on that loan, ask yourself: Can I make this dream trip happen in a smarter way? The answer, almost always, is yes.
For more such stories and deeper insights into mutual funds, investing strategies and how to make money harder for you, keep reading Value Research Online.
Also read: If home loan EMI is 61% of our income, our future's at risk
This article was originally published on August 08, 2025.
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