How Popular are Personal Loans for Travel?
The answer is more than you might think.
While personal loans rank fifth at NOW FINANCE in terms of the number of loans settled, this still represents over 8% of all the personal loans we settle.
Who is Borrowing to Travel, and How Much do they Borrow?
The average personal loan taken out for travel purposes from NOW FINANCE is around $11,500, which fits well with our previous look at how you can take a dream holiday for $10,000 and how to budget for a trip to Europe.
Other statistics relating to personal loans for travel include:
- Only 11% of personal loans for travel go to people with mortgages.
- 44% of travel loans go to individuals who describe themselves as single and don’t have children.
- In total, 67% of travel loans are settled to individuals both single and in a relationship who don’t have children.
- The average age of someone receiving a settled personal loan for travel is 39.
- 65% of travel personal loans are issued to men, though we don’t know how many of them use the loan to travel with a partner, and likewise for women.
This gives us a pretty clear picture of the type of person who is taking out a travel loan.
We previously looked at the cost of the Australian Dream as well as what the Australian Dream looked like in the modern day, and in many ways this is reflected in the data. Today, Australians aren’t always bought into the belief that they need to own their own home in order to be seen as successful, while many are even shunning the idea of ever owning a home, instead choosing to live for today and embrace a variety of life experiences instead.
It’s clear from our data that one of those life experiences is travel. If you’re free of the commitments that home ownership and having children bring, when why not head out and see some of the world.
Where are Travel Loans Popular?
According to data from Ray Morgan, travel loans are most popular with residents of New South Wales, who are responsible for 29.5% of all travel loans that are settled in Australia.
The table below highlights how New South Wales stacks up in this regard against the other states in the country. Note that ACT data is included in New South Wales figures, and there is no data for Tasmania.
What is notable about the figures is that Queensland is just behind New South Wales, which is also the case when it comes to tourist visitor numbers and expenditure. So, we have a situation where the two most popular tourist destinations in Australia are also the two states where it is more common for residents to take out a travel loan.
It is also worth looking at how the numbers breakdown within these figures. While for New South Wales there is roughly a 50/50 split between personal loans going to those resident in Sydney and those elsewhere in the state, for Queensland around 75% of loans are issued to those living in Brisbane, against 25% elsewhere across the state.
Where are People Going with Their Loans?
While one assumption might be that people take out travel loans and head abroad, it is far likelier that they’re actually staying at home. With 75% of all of Australia’s tourism revenues coming from domestic tourism, and the dollar spend significantly growing once again, according to the Australian Bureau of Statistics, and the ability to travel easily around New South Wales by car – or alternatively to fly up to Brisbane, down to Sydney, or across to Adelaide – this would certainly seem to be the case. This is also supported by our most recent customer survey that highlighted 40% of Australians never travel overseas.
Given the equal split between travel loans being distributed to Sydney residents and those across other locations in New South Wales, there could also be an appetite among Sydney residents to escape the busy nature of life in the city and explore further afield, and vice versa for those living elsewhere.
The opportunity to take different types of holidays may also appeal, with winter holidays in Victoria’s Alpine National Park proving increasingly popular each year, while those who live in more remote regions commonly enjoy trips to the coastal cities. Finally, there is thought to be an increasing appetite among Australians to visit the major landmarks found across the country, from National Parks to the Great Barrier Reef and Uluru becoming increasingly popular among domestic tourists.
What Will Future Trends Bring?
It is likely that New South Wales will remain the most common location for travel loans for the reasons explored earlier, while we’d imagine Queensland will remain a popular location for people wanting travel loans, too. While we haven’t yet mentioned Western Australia, despite the continued growth of Perth we believe travel loans will remain popular here, too, particularly with those wanting to visit the eastern side of the country for an extended trip.
Wherever you are in Australia, with a NOW FINANCE travel loan you could see more of Australia or travel abroad at a competitive interest rate. You can get your rate here before applying, or call us on 1300 275 669 with any questions you have.
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