BENGALURU: As the general secretary of the Contract Doctors’ Association in Bihar, Dr Abhishek Kumar Sinha, who is now based in Bengaluru, has to travel frequently between the city, Delhi and Patna. While this would leave a considerable dent in his pocket, things are tougher now as the doctor is on the lookout for a job and a steady income. In an attempt to make his next trip as economical as possible, Dr
Sinha opted to use the option of travel finance, and is now gradually paying off the installments. “The biggest advantage in my situation is that I won’t be cash-strapped with this option. I’m on the lookout for a job as well so paying back smaller sums over a longer period of time is an easier alternative,” explains the 38-year-old.
Other Bengalureans share Dr Sinha’s idea and are choosing to finance their inter-country travels through low-cost EMIs. For his recent trip to Chennai, Sujan Sekhar Gadepall’s airfare alone was about `4,000, which the 39-year-old business development manager opted to pay-off through EMIs. “Instead of paying the entire amount upfront while booking my tickets, I can now spread it out over the next few months. While booking tickets for my international flight, I realised it was difficult to shell out such sums from my savings during month-ends. Soon, I started using the facility for my local travels too,” he says.
Tracking the trend
About two years ago, Dr Sinha approached a bank seeking financial assistance for a trip he was planning. “They created quite the ruckus and outright rejected my request. While I was granted a personal loan, it was still too expensive for me to avail and all requests for a exclusive travel finance plan fell on empty ears,” he recalls.
A MakeMyTrip spokesperson explained that while the earlier generation were able to buy a house or car only towards the end of their retirement, the current generation wants to complete their aspirations earlier. “This generation is big on travel and while banks offer options too, the interest is often high, making it inaccessible,” explains the spokesperson. Major banks in the country offer personal loans with a minimum interest rate of 10 per cent.
The travel company sought to address this gap with a zero-interest low cost EMI option that a customer can avail to book his flights or accommodation (with a credit limit of `2,00,000) and then replay the amount over the next nine months. Since the launch of this service in 60 Indian cities at the beginning of the year, about 20 per cent of the users were recorded to be from Bengaluru.
According to Kapil Goswamy, MD, Big Breaks.com, while it was earlier considered uncommon for people to take a loan to travel, there has been a change in how travellers think, which the market has responded to with new avenues available to them.
Age factor
For Ashok Chandrashekar, a 44-year-old with a real estate business in Bengaluru, the biggest advantage of the offer was the immediacy with which his credit limit was guaranteed to him. The businessman recently visited Varanasi with his family of four for Kumbh Mela, wherein the total expenditure of the trip was `1,37,000.
Interestingly, while rolling out the programme, MakeMyTrip’s team assumed that the plan would be an instant hit with millennials, but they soon found that the average age group was older, and lied between 32-34 years. Most, like Chandrashekar, have spent at least 10 years working, probably have a family and want to take care of their family holiday or international trip aspirations. “It’s another reason why people seem to be keen on using EMIs. Instead of dipping into their savings, the options allows people to take out the expense from their future earnings,” says the official spokesperson.