With travel, gifting, and festive celebrations at their peak, the holiday season in India is often accompanied by increased expenses. Whether it’s Diwali shopping, a winter vacation, or planning a destination wedding, many people turn to loans to bridge the financial gap.
In 2025, Indian borrowers have more lending options than ever—especially when it comes to holiday loans and personal loans. But which one gives better value for your money?
What Is a Holiday Loan?
A holiday loan is a type of short-term personal loan offered by banks and NBFCs (Non-Banking Financial Companies) specifically for festive spending or travel during the holiday season.
Key Features:
- Loan amounts typically range from ₹25,000 to ₹2,00,000
- Tenure is shorter, often 3 to 12 months
- Quick disbursal and minimal documentation
- Fixed EMI plans, often with festive discounts or cashback offers
Pros:
- Fast approvals—ideal for last-minute travel or festival purchases
- Suitable for small, short-term expenses
- Often comes with promotional offers from banks like SBI, HDFC, Axis, and ICICI during festive seasons
Cons:
- Interest rates can be higher (usually between 12% and 20% p.a.)
- Short repayment tenure can mean high EMIs
- Limited flexibility compared to regular personal loans
What Is a Personal Loan?
A personal loan is a general-purpose loan that can be used for any financial requirement—be it medical expenses, education, wedding, or holidays.
Key Features:
- Loan amounts range from ₹50,000 to ₹40,00,000 or more
- Tenure varies between 1 to 5 years
- Offered by both banks and digital lending platforms
- Requires stable income and a good credit score
Pros:
- Competitive interest rates (starting as low as 10.5% p.a. for salaried professionals)
- Flexible repayment options
- Larger loan amounts to suit high-value travel or big-ticket expenses
Cons:
- Stricter eligibility checks (CIBIL score, income proof)
- May take slightly longer to process (1–3 days)
- Might involve processing fees and prepayment charges
What’s New in 2025?
Indian lending has gone increasingly digital in 2025. Here’s what’s trending:
- Digital-only lenders like Navi, KreditBee, and CASHe are offering instant personal loans through apps
- BNPL (Buy Now, Pay Later) options are replacing small-ticket loans for holiday shopping
- AI-driven credit checks allow faster approval for even low CIBIL-score applicants
- RBI’s focus on regulating digital lending means safer, more transparent terms for borrowers
Holiday Loan vs Personal Loan: Which Offers Better Value in India?
Choose a Holiday Loan if:
- You need quick cash for travel or shopping during the festive season
- You can repay within a few months
- You don’t want a long-term commitment
Choose a Personal Loan if:
- You’re planning a bigger holiday, wedding, or high-value event
- You need flexible tenure and better rates
- You have a good credit score and steady income
In Conclusion
For smaller, urgent holiday expenses, holiday loans offer convenience and speed. But if you’re looking for lower interest rates, higher loan amounts, or longer repayment periods, a personal loan is more cost-effective and offers better long-term value.
