The Rise of Lifestyle Loans: A New Borrowing Trend

Understand how these loans work and whether they’re worth it

The concept of loans has always been strongly tied to life milestones, such as buying a home or financing years of education.

However, a new trend has been gaining ground in the American credit market: Lifestyle Loans, una categoría que ya mueve miles de millones de dólares.

Instead of financing durable goods or long-term assets, Lifestyle Loans are aimed at experiences and immediate consumption.

What Are Lifestyle Loans?

Lifestyle Loans are short- to medium-term personal loans, usually unsecured, designed to fund personal desires and experiences.

These loans can be obtained from banks, fintechs, or even directly from partner establishments, such as aesthetic clinics and travel agencies.

Although technically classified as “personal loans,” Lifestyle Loans differentiate themselves through their marketing approach.

They are not positioned for financial emergencies or debt consolidation but are promoted as tools to “make dreams come true” and “live in the moment.”

The Accelerated Growth in 2025

Recent data from TransUnion indicates that, in 2025, the demand for Lifestyle Loans grew by 18% compared to the previous year, reaching a volume of $146 billion in new loans.

The travel and tourism sectors account for approximately 30% of this amount, with personal events and aesthetic procedures close behind.

What explains this growth?

With the popularization of Buy Now, Pay Later (BNPL) platforms for small purchases, consumers have become accustomed to the idea of financing experiences.

Lifestyle Loans emerge as an extension of this mindset for larger amounts, facilitated by financial institutions.

The constant exposure to luxurious lifestyles and exclusive experiences on social media pushes consumers to find ways to finance this type of consumption—even if it means taking on debt.

As credit card interest rates exceed 22% per year, many consumers view Lifestyle Loans as a cheaper credit option, with fixed terms and predictable installments.

Who Is Taking Out These Loans?

The typical Lifestyle Loan borrower is a millennial or Gen Z individual, especially those earning between $50,000 and $120,000 annually.

Additionally, many of these consumers prioritize experiences over material possessions—a trend widely studied in the behavior of younger generations.

The Economic Implications of Lifestyle Loans

From a macroeconomic perspective, the growth of Lifestyle Loans is both a warning sign and an opportunity.

On one hand, it injects immediate liquidity into the consumption of goods and services, boosting sectors like tourism, entertainment, aesthetics, and technology.

At a time when the U.S. GDP seeks stability after inflationary cycles, financed consumption can act as an important economic engine.

On the other hand, there is a considerable risk of increasing household debt, especially if repayment conditions are underestimated.

In a high-interest-rate environment with potential fluctuations in household income, defaults on these loans could trigger a domino effect, harming the financial health of families and, consequently, increasing delinquency in the financial system.

Another key point is the difference between productive credit and consumption credit. While the former tends to generate economic returns (such as an education loan or a business loan), the latter is exhausted upon use, without creating assets that can appreciate over time.

Banks, Fintechs, and a New Market Niche

Major banks like Chase and Wells Fargo already offer personal loan lines with specific campaigns for financing travel and events.

Fintechs like SoFi and Upstart leverage artificial intelligence to offer personalized loans with more competitive rates and terms, targeting exactly this aspirational consumer segment.

Additionally, partnerships between e-commerce platforms and financial institutions have expanded the availability of instant credit at the point of purchase.

Consumers Need to Be Cautious

Before taking out a Lifestyle Loan, consumers should ask themselves:

• Is this experience essential, or can it be postponed until I have my own resources?
• What is the impact of this debt on my monthly budget?
• Am I aware of the total costs involved (interest, fees)?
• Is there a cheaper financing alternative, such as saving for a few months?

Personal finance experts recommend that consumers use Lifestyle Loans in a punctual and well-planned manner, avoiding turning this type of financing into a habit. Otherwise, what begins as a dream facilitator can become a cycle of debt that is hard to break.

Written by

Gabriel Gonçalves