EdTech Loans: 3 Traps Costing You ₹Lakhs?

EdTech platforms are offering easy loans to enrol students in courses. But high interest rates, no job guarantee, and aggressive recovery tactics have burned many borrowers before. Here's what to watch before you sign.

Here's what happened: Several Indian edtech platforms now partner with NBFCs or lend directly to fund course fees, sometimes ₹50,000 to ₹2 lakh or more.. Past edtech lending models — most notably BYJU'S — collapsed under complaints of mis-selling, hidden charges, and coercive loan recovery tactics.. Regulators including RBI and consumer courts have received thousands of complaints from students stuck with loans for courses they could not complete or that delivered no jobs..

What you should do: Check the APR (Annual Percentage Rate), not just the EMI — edtech loans can carry 18–28% interest, far higher than a bank education loan at 9–12%.. Ask for a written job placement guarantee or income-sharing clause BEFORE borrowing — verbal promises mean nothing if the platform shuts down.. Compare with a formal bank or NBFC education loan: nationalized bank loans offer moratorium periods, lower rates, and Section 80E tax deductions that edtech loans usually do not..

Under Section 80E of Income Tax Act, interest paid on education loans from recognised financial institutions is fully deductible — but this benefit does NOT apply to most edtech platform loans, costing you thousands extra every year.