Student Loans via EdTech: Are You Paying Too Much?

PhysicsWallah dropped its plan to lend directly to students and will now partner with NBFCs instead. If you or your child is taking a loan to pay for an online course, here's what you need to know before signing anything.

Here's what happened: Edtech platforms increasingly offer 'study now, pay later' loans — often through NBFC partners who charge 15–24% annual interest. Many of these loans are unsecured personal loans repackaged as education finance, with no moratorium period after course completion. Unlike bank education loans, NBFC-backed edtech loans rarely qualify for income tax deduction under Section 80E.

What you should do: Check the loan type: ask if it's an 'education loan' or a personal loan — the interest rate and tax benefits differ significantly. Compare with a bank education loan before signing any edtech platform's loan offer — SBI, Bank of Baroda offer rates from 8.5–10%. Verify the lender's name on your loan agreement — you must know which NBFC holds your debt, not just the edtech platform's name.

Only loans from scheduled banks and eligible financial institutions qualify for Section 80E tax deduction — NBFC edtech loans often do NOT, costing you ₹15,000–₹45,000 extra in taxes over the repayment period.