Last month, a parent showed me an education-course agreement that had been presented to his daughter on a tablet. The sales executive had told them the course would cost “only ₹4,999 a month”. The family had not yet understood that this was a loan, that the lender was a separate company, that the total repayment was substantially higher than the advertised course fee, or what would happen to the EMI if the student stopped attending.
My blunt advice is simple: do not judge an ed-tech course loan by its monthly EMI. Before signing, calculate the total amount payable, identify the actual lender, check the interest and processing charges, understand the cancellation and refund terms, and confirm whether the loan continues even if the course disappoints or the provider shuts down.
The monthly number is designed to make an expensive decision feel small. Parents need to reverse that psychological trick.
The EMI is not the price of the course
I understand why families look at the EMI first. A course priced at ₹1.2 lakh may sound impossible, while ₹5,000 a month appears manageable. The sales conversation is usually built around this difference. “It is less than the cost of a tuition teacher,” the parent is told. “You will not feel the burden.”
But an EMI is only a repayment schedule. It does not tell you what the course costs, what the loan costs, or whether the family can continue paying during a period of unemployment, illness, or another financial emergency.
Take a simple illustration. Suppose the course fee is ₹1,20,000 and the financing company offers a 12-month loan at 18% annual interest, with a 2% processing fee plus GST. The EMI may look close to ₹11,000. The family may focus on that monthly figure. But the relevant questions are:
- How much money is actually disbursed to the course provider?
- How much will the family repay in total?
- Is the processing fee deducted upfront or added to the loan?
- Is the stated interest rate annual, monthly, flat, or reducing-balance?
- Are there late fees, bounce charges, insurance charges, or collection costs?
- Does the repayment begin immediately, even if the student has not started classes?
Ask the lender for a written repayment schedule. I would not sign based on a salesperson’s verbal explanation or a calculator displayed on a phone.
My rule: if the family cannot state the total amount that will leave its bank account, it is not ready to sign the loan.
Who is lending the money?
Many parents think they are paying the education company in instalments. Often, they are not. The course provider may have partnered with a bank, a non-banking financial company, or a digital lending platform. The lender pays the provider, and the parent becomes responsible for repayment to the lender.
This distinction matters because the course provider and the lender may be legally and operationally separate. If the provider closes its centre, changes the faculty, removes promised services, or stops responding to complaints, the lender may still demand the EMI.
Before signing, I would ask for:
- the legal name of the lender;
- its registered address and customer-care details;
- the loan agreement, not merely the course enrolment form;
- the annual percentage rate or equivalent total cost;
- the repayment schedule;
- the grievance-redressal process;
- the name of the regulated entity, if a lending platform is involved.
Parents should verify the lender independently. Do not rely only on a WhatsApp number or a sales executive’s assurance that “this is RBI approved”. The Reserve Bank of India publishes information about regulated banks and non-banking financial companies. If the arrangement involves a digital lending app, read the lender’s documents carefully rather than assuming that the app itself is the lender.
I am not saying every education loan offered through an ed-tech company is improper. Financing can make useful education accessible. But the person selling the course is not necessarily the person carrying the credit risk. Parents must know the difference.
What happens if the student leaves the course?
This is the clause most families neglect because, at the time of enrolment, everyone is optimistic. The student is excited. The parent wants to support the child. The sales team is speaking about ranks, placements, salaries, and a better future. Nobody wants to discuss what happens if the course is unsuitable after two weeks.
Yet courses fail to work for ordinary reasons. The student may discover that the teaching is poor. The promised mentor may not be available. The timetable may clash with college. The family may move cities. The student may become ill. The course may be too advanced or too basic. A parent may lose a job and no longer be able to pay.
Read the withdrawal and refund policy before paying anything. Look for specific answers to these questions:
- Can the student cancel within a cooling-off period?
- How is the refund calculated?
- Is the refund paid to the parent or directly to the lender?
- Does the loan stop when the course is cancelled?
- Who pays interest during the refund process?
- Are registration, technology, examination, or “administrative” charges non-refundable?
- Does merely logging into the platform count as consuming the course?
A course refund and a loan cancellation are not automatically the same thing. A provider may agree to refund the fee while the lender continues to debit EMIs until the loan is formally closed. Get written confirmation of closure and any applicable “no dues” document.
I have written separately about how to seek a refund from an ed-tech company in India. The practical lesson is to preserve every document: the advertisement, brochure, WhatsApp messages, call recordings where legally permissible, receipts, agreement, and complaint numbers.
Do not confuse a course promise with a job promise
The most dangerous sales pitch is not the EMI. It is the implied guarantee that the EMI will pay for itself through a future job.
Parents are shown salary figures, placement photographs, and testimonials from successful students. They may hear that “hundreds of companies hire from this programme” or that a student can earn ₹10 lakh after completing a short course. Such claims require careful examination.
Ask for the placement definition. Does “placed” mean a full-time job, an internship, a short-term contract, or a commission-based sales role? Is the salary the fixed component or the total cost-to-company figure? How many students enrolled, how many completed the course, and how many received the advertised outcome?
A provider that claims a 90% placement rate should be willing to disclose the denominator. Ninety placements out of one hundred graduates is very different from ninety placements out of five thousand enrolments.
Also ask whether the salary figures relate to the exact course being sold, the same city, and the same academic year. A few impressive testimonials do not establish a predictable outcome for every student.
As an angel investor, I see a similar error when founders present their best month as if it represents the entire business. One successful student is not a placement rate. One high salary is not a career guarantee. Parents should demand the same discipline from education sellers that investors demand from entrepreneurs.
Check the course itself, not only the financing
A cheap loan does not make a poor course good. A low-interest EMI can still finance a bad decision.
I would examine the course as if I were buying a medical procedure or investing in a company. What exactly is being delivered? Who is responsible? What evidence suggests that it works? What happens when the expected result does not occur?
| What the brochure says | What I would ask |
|---|---|
| Industry-ready programme | Which specific skills are taught, and how are they assessed? |
| Expert faculty | Who teaches each module, and can I see their qualifications and current involvement? |
| Placement assistance | Does this mean introductions, interviews, internships, or guaranteed employment? |
| Certificate from a leading institution | Who issues it, and is it an academic qualification or simply a course-completion certificate? |
| Live projects | Are these real projects with external clients or simulated assignments? |
| Lifetime access | What happens if the platform or company shuts down? |
Parents should also check the course prerequisites. A beginner may struggle in an advanced coding programme. A student looking for a recognised degree may discover that the course only awards a private certificate. The Schema.org Course documentation lists useful information that a serious course provider should be able to describe clearly: prerequisites, syllabus, educational level, language, credentials, and course instances. Structured data on a website is not proof of quality, but the underlying questions are sensible ones.
If the provider cannot show a detailed syllabus, assessment method, faculty responsibility, and credential description, I would not borrow money for the course.
The parent may be taking the loan, not the student
In many families, the student is a minor or has no independent income. The parent becomes the borrower, co-borrower, or guarantor. This means the parent’s credit record carries the consequences of missed payments.
Read whose name appears on every document. The person who clicks “accept” may not realise that the loan is being reported against their credit history. A missed EMI can lead to collection calls, penalties, and damage to the borrower’s ability to obtain a home loan, vehicle loan, or medical loan later.
Never allow a sales executive to use a parent’s phone, Aadhaar, PAN, bank account, or OTP casually. Know what consent is being given. Do not share banking passwords. Do not sign blank forms. Do not permit access to contacts, photographs, or unrelated phone data unless you understand why it is being requested and whether it is lawful.
Parents should be especially careful with “no-cost EMI” offers. The interest may be paid to the lender by the seller, or it may be embedded in the price, or a discount may be withdrawn when financing is chosen. Compare the cash price and the financed price in writing. “No-cost” does not mean “no additional financial obligation”.
What if the company disappears?
Indian parents have already seen large education companies struggle, restructure, or enter insolvency. I wrote about the implications in my earlier post on Byju’s insolvency and Aakash. The lesson is not that every ed-tech company is unsafe. It is that a famous brand is not a guarantee that the service will exist for the duration of the loan.
Ask where course content is hosted and whether you can retain access to material you have already paid for. Ask whether certificates will remain verifiable if the company shuts down. Ask who will provide support if the original provider is acquired or its centre closes.
Most importantly, do not assume that the lender shares the provider’s business risk. A lender may have paid the provider at the beginning. The lender’s contract may be with the borrower, not with the quality of the teaching. Unless the agreement clearly provides otherwise, the EMI may continue.
A course can fail and a loan can remain perfectly enforceable. Parents must examine those two risks separately.
How I would evaluate an ed-tech course loan EMI
If a family asked me for practical help, I would ask them to complete this exercise before signing:
- Write down the cash price. Include taxes, registration, examination, device, hostel, and other compulsory charges.
- Write down the financed price. Include every rupee that will be repaid to the lender.
- Calculate the difference. This is the cost of borrowing and associated charges.
- Identify the borrower. Check whose credit history and bank account are exposed.
- Read the cancellation clause. Do not rely on the salesperson’s promise that “we will manage it”.
- Check the lender independently. Save the lender’s official contact details and grievance process.
- Test affordability under stress. Could the family pay for six months if the main earning member lost income?
- Wait 24 hours. A genuine educational opportunity will survive one night of careful thought.
The affordability test is more important than the interest-rate comparison. If a family has no emergency savings and the EMI consumes a meaningful part of monthly income, the loan is risky even if the rate is reasonable. Education is valuable, but no course justifies putting the household’s rent, food, healthcare, or existing loan repayments at risk.
What parents should demand in writing
Before paying, I would ask the provider to email a single document containing the course fee, all compulsory charges, duration, teaching format, faculty details, syllabus, credential, refund policy, placement claims, and financing terms. If the answer is scattered across a brochure, a website, a WhatsApp message, and a verbal promise, the family will struggle to prove what was sold later.
I would also ask the lender to provide the key loan facts in plain language. The Reserve Bank’s consumer information resources are a useful starting point for understanding lending-related questions, though families should still read their own agreement carefully.
Do not be embarrassed to say, “Please give me the agreement; I will take it home.” A parent who asks for time is not being difficult. A parent who signs immediately because the counsellor says the offer expires tonight is being rushed into a financial commitment.
My position on financing education
I am not against borrowing for education. A well-chosen degree or professional qualification can create opportunities that a family could not otherwise afford. Credit can be useful when the course is credible, the outcome is reasonably understood, the repayment is affordable, and the borrower has a fallback plan.
But I am strongly against borrowing for a vague promise dressed up as a career pathway. I am against selling a ₹1 lakh course by hiding its price behind a ₹3,000 EMI. I am against making parents feel that hesitation means they do not care enough about their child. And I am against linking a loan to a course without making the exit terms completely clear.
My experience in medicine has made me cautious about promises. Before an IVF treatment, a responsible doctor discusses costs, alternatives, uncertainty, and what happens if the first attempt does not work. We do not show only the happy photograph and hide the difficult parts. Education providers should meet the same standard when they ask a family to borrow money.
My experience as an investor has taught me another lesson: the quality of the decision matters more than the confidence of the salesperson. A polished presentation can conceal weak fundamentals. A famous logo can conceal a fragile business. A small EMI can conceal a large liability.
So my advice to parents is specific. Do not ask, “Can we afford ₹4,999 this month?” Ask, “What will this course cost in total, who will I owe, what do I receive, and what happens if it does not work?” If the answers are not written clearly on the day you sign, keep your money—and your signature—at home.