A report reveals that personal loans, which were mostly taken for travel purposes has increased by 55%
While on one hand Baba Ramdev is improving the health of millions in India, on the other hand, millennials forming around 40% of the country’s working population are facing several health issues primarily due to the stressful work culture. A quick solution to rejuvenate their fatigued bodies and stressed minds is weekend getaway trips, which has become a new normal among millennials.
Millennials are not only opting for domestic weekend travels but have also started flying off to international destinations to relish their long weekends. International travel destinations mostly include Sri Lanka, Dubai, Nepal, Thailand, Bhutan, among others, in addition to luxurious locations like Europe, the USA, Australia, New Zealand and even the South Americas. According to a report, most millennial travellers choose to travel countries that offer visa on arrival due to their habit of finalising trip on the eleventh hour. It clearly shows that the love for travel is reaching new heights and these individuals are no more focused on investing in assets like homes but more on travelling to explore newer destinations. It has been anticipated that India will witness 50 million outbound tourists by 2020.
What adds to this growing travel trend is budget-friendly travel packages, including low-cost carrier airlines, on-demand car rentals, economical stays, and enhanced transport facilities. With such a comprehensive range of travel packages and easy loan options, millennials don’t want to exhaust their lives staying dedicated to a 9-to-5 job. Another unique feature of today’s travellers is increasing preference for local experiences and in-city activities, which has amplified by 178 % in the last couple of years. It is anticipated that experiential travel will boom in the coming years with people banking on more offbeat experiences.
With travel plans getting grander, often, millennials need to borrow money to embark on their smart experiential travels. Millennials working with reputed corporate and on a high growth career trajectory are open to taking unsecured personal loans as they are confident of their ability to pay back loans from their future income. A report reveals that personal loans, which were mostly taken for travel purposes has increased by 55%, of which 85% borrowers were millennials who took loans in the range of Rs 30,000 - Rs 2 lakh.
For millennials that mostly comprise young and tech-savvy salaried individuals, traditional lending systems like banks are defunct. Hence, they approach various digital lending platforms that give easier access to personal loans at competitive interests even with no credit history, and most importantly, the loan is available at their fingertip.
On this note, several digital lenders, therefore, are increasingly coming off with more and more customised travel offers for millennials while ensuring them a balanced lifestyle, without burning a hole in their pocket. With small loan amount and interest rates as low as Rs 10,000 to up to Rs 1 million, these loans have become a lucrative and convenient option for millennial travellers to tick off places on their travel list.
However, proper approach and planning is crucial before applying for a travel loan to avoid financial distress at a later stage. For instance, borrow only an amount that you are sure to pay off easily. Choose an appropriate tenure and an EMI which you comfortably pay from your monthly salary. Plan a smart travel budget and make sure you stick to it. Always buy a suitable travel insurance policy to avoid loss during travel due to unforeseen or unfortunate events. Keep all your documents including income proofs, KYC and bank statements to reduce the chances of your application rejection. Last, but not least, maintain extra savings in your account to be able to make timely EMI payments, which is essential to having a healthy credit score.
Experiential travelling is set to boom in the future, with changing lifestyles and increasing overseas travels of millennials who are more than happy to borrow to fulfil their dreams. They have been enabled by the new digital lenders in their journey to living a enriched and fulfilling life.
The author is the Co-Founder and CEO at MyLoanCare.com