Personal Loans for Upgrading Your Lifestyle – Pros and Cons

In today’s fast-paced world, upgrading your lifestyle has become more than just a desire and it’s often seen as a reward for your hard work. Whether it’s buying the latest gadget, taking a luxury vacation, or redesigning your home, a little indulgence can make life more fulfilling. But what happens when your savings can’t keep up with your aspirations? That’s where personal loans step in — offering the freedom to live better, sooner.

India’s Lifestyle Loan Trend

As per a recent report, nearly 48% of Indians now use personal loans for lifestyle expenses like shopping, travel, or home upgrades. A Business Standard report adds that 1 in 4 personal loans in 2025 funded holidays, with 71% of those borrowers coming from Tier-2 and Tier-3 cities. Clearly, lifestyle loans are no longer just a metro trend.In fact, personal loan disbursals grew from ₹10.7 lakh crore in FY 2023 to ₹14.6 lakh crore in FY 2025, reflecting India’s growing comfort with borrowing for convenience and comfort.

Before opting for a personal loan, you must consider a few parameters.

Pros of Taking a Personal Loan for Lifestyle Upgrades

1. Instant Access to Funds

   Personal loans give you quick access to money without long waiting times or collateral. This means you can plan that dream vacation or home makeover right away.

2. Flexible Use

   Unlike education or car loans, personal loans come with no usage restrictions. Whether it’s upgrading your wardrobe, renovating your home, or buying a new phone — it’s your call.

3. Builds Credit History

   When managed well, regular repayment of a personal loan can help improve your CIBIL score, showing lenders that you’re a responsible borrower.

4. Improves Quality of Life

   Sometimes, lifestyle upgrades are about convenience and comfort — like better home appliances or ergonomic furniture. These add long-term value to daily life.

Cons of Taking a Personal Loan for Lifestyle Upgrades

1. High Interest Rates

   Personal loans are unsecured, so interest rates tend to be higher — often between 10% and 24% p.a., depending on credit profile.

2. No Asset Creation

   Unlike a home or vehicle loan, lifestyle borrowing doesn’t create an appreciating asset. You’re essentially paying EMIs for experiences or consumables.

3. Debt Trap Risk

   With easy availability, it’s tempting to borrow frequently. But 47.8% of borrowers already using loans for lifestyle shows a rising concern of over-leveraging among young consumers.

4. Affects Future Borrowing

   High EMIs reduce disposable income and raise your debt-to-income ratio — making future loans (like home or business loans) harder to qualify for.

When a Personal Loan Makes Sense

• You have a stable income and your EMI won’t exceed 30% of your net salary.

• You’re using the loan for something meaningful or long-term, like a family trip or home improvement.

• You’ve compared loan options and chosen the one with lowest interest rate and flexible tenure.

• You maintain a healthy emergency fund and avoid parallel high-interest debts.

When It Doesn’t

• The purchase is impulsive or short-lived (like luxury shopping sprees).

• You’re already managing multiple EMIs or credit card dues.

• The repayment plan stretches your monthly budget.

• You don’t have backup savings for emergencies.

Smart Borrowing Tips

✅ Compare before you commit: Always check rates, tenure, and fees across banks and NBFCs.

✅ Borrow only what you need: Don’t use the maximum approved limit just because you qualify.

✅ Automate your EMIs: Prevent late payments that can hurt your CIBIL score.

✅ Track your spending: Avoid using loans for non-essential expenses.

✅ Prepay when possible: Save interest by making early payments or part prepayments.

How One Day Finance Can Help

At One Day Finance, we believe that lifestyle upgrades should be rewarding, not stressful. Our personal loans for lifestyle expenses are designed to give you:

• Quick approvals and disbursals — so you don’t have to wait to live better.

• Flexible repayment tenures that fit your income pattern.

• Transparent terms with no hidden charges.

• Guided borrowing to help you maintain financial balance.

With our strong partnerships with leading banks and NBFCs, we help you find the most affordable loan or give you tips even if your CIBIL score is on the lower side.

Conclusion

A personal loan can be your ticket to a better lifestyle — but only if used wisely. It can help you travel, shop, or upgrade your home, but misuse can turn luxury into liability.Balance your ambitions with financial discipline, and when you’re ready, One Day Finance is here to help you make confident, smart choices; get in touch now.