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Millennial travellers opt for loans to see dream destinations

With many financing avenues available, travel gets affordable for globetrotters.

, ET Bureau|
May 11, 2019, 07.08 AM IST
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Cox & Kings said the percentage of travellers opting for loans through them has gone up to about 12% from 5% over the past two to three years.
NEW DELHI: Whether it’s a trip to the Game of Thrones sets or skydiving in Pattaya, more Indian travellers are opting for travel loans to tick the boxes of their dream destinations and bucket lists.

While Thomas Cook and Cox & Kings have been offering travel loans to customers for a while, operators say the quantum of such advances has been going up steadily on the back of the growing millennial travel base and online accessibility, which has spawned digital startups.

Startups including Paytm and BigBreaks have started offering EMI facilities to customers over the past few months.

Depending on the travel agent and a customer’s risk profile, the interest rate varies from 9% to 13% and in some cases even 0%, for up to 18 months.

SanKash, a Gurgaon-based startup that began offering travel loans six months ago, now generates about 100 loan requests daily.

“We have seen customers moving from domestic tours to international travel and shift vacations from Asia to Europe. They are able to enjoy the one vacation they take exactly the way they want it and further take more than one, too,” said Akash Dahiya, cofounder of SanKash. “With our aggregator partnerships with entities like Travel Boutique Online and BirdRes, we reach out to 1,000 partners at a pan-India level and plan to reach 10,000 by next year.”

SanKash has NBFCs Apollo Finvest and DMI Finance as its partners and a large private sector lender taking a risk on this segment, Dahiya said.

Thomas Cook, which works with SanKash besides Tata Capital and Bajaj Finance, is launching a product called Holiday Basket, which will allow middle-class Indian travellers to pick two overseas and two domestic destinations in two years, with loans sanctioned in advance for select options. Thomas Cook said the loans should help travellers insulate themselves from developments such as the recent aviation crisis and unexpected price increases.

“We have witnessed over the past few years fairly aggressive growth in terms of the number of people enquiring about travel loans. People are now used to the fact that across products and services, loans are being offered. As more young customers come into play, they are more aligned to the concept of taking loans, even for a vacation,” said Abraham Alapatt, president, and group head, marketing, service quality, value added services and innovation at Thomas Cook.

Cox & Kings said the percentage of travellers opting for loans through them has gone up to about 12% from 5% over the past two to three years.

“There are reasons for it. One, easy availability of credit and second is the understanding that taking a loan for a holiday is no longer frowned upon. There is no specific destination or tour package. It all boils down to affordability. Ideally, travel loans are taken by people when the ticket size of the holiday is over Rs 50,000 per person,” said Karan Anand, head of relationships.

According to Anand, earlier, it was primarily banks that offered loans for travel but now many NBFCs are also offering loans at zero per cent interest.

Digital loan platform India-Lends said personal loans for travel have grown 55% over the past year. Millennials account for 85% of loan seekers on IndiaLends, looking to borrow amounts ranging from Rs 30,000 to Rs 2.5 lakh.

The company said many travel plans are the result of long weekends and last-minute holiday planning, which require quick, accessible financing options.

“It’s not just those who don’t have enough savings, but also those who want better travel experiences or wish to visit finer destinations who are opting for loans,” said Gaurav Chopra, founder of IndiaLends.

Heena Akhtar, cofounder of TripXOXO, a digital platform for travellers to book experiences and sightseeing tours, said popular activities in the itineraries of loan-seeking customers include skydiving in Pattaya and a tour of the Game of Thrones sets in Spain, Ireland and Croatia.

On Paytm, interest rates for EMI options depend on the credit cards and could range from 13% to 17%.

“It is uncommon for people to take loans to travel but there is a gradual change in how travellers think. As more money is infused into the economy, the market has opened up new avenues for travellers,” said Kapil Goswamy, MD of BigBreaks.com.
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