What Are the Pros and Cons of Taking an Education Loan for Part-Time Studies?

Understanding Education Loans for Part-Time Studies

In India, education loans serve as a vital support system for working professionals seeking to enhance their qualifications without interrupting their careers. While part-time and distance learning programs offer flexibility, the high tuition fees can be a major obstacle. 

By covering these costs, education loans enable professionals to upskill and advance academically without compromising their financial security or work-life balance.

Pros of Taking an Education Loan for Part-Time Studies

Here are the key advantages of taking an education loan for part-time studies:

1. Financial Support – Covers tuition fees, books, and study materials without depleting savings.
2. Flexible Repayment – Step-up EMIs and moratorium options help align payments with income growth.
3. Tax Benefits – Interest paid on education loans is tax-deductible under Section 80E of the Income Tax Act.
4. Lower Interest Rates – More affordable than personal loans, with concessional rates for some courses.
5. Career Growth – Upskilling without quitting a job can lead to promotions and salary hikes.
6. Credit Score Improvement – Timely repayment builds a strong credit history for future loans.
7. Secured & Unsecured Loan Options – Borrowers can choose based on their financial situation, with NBFCs offering unsecured loans up to ₹65 lakh.
8. Visa Approval Support – Loans serve as proof of funds for studying abroad.
9. Employer Sponsorship – Some companies offer tuition reimbursement, reducing financial burden.
10. Loan Refinancing – Balance transfer or refinancing can lower interest rates and ease repayment.

Cons of Taking an Education Loan for Part-Time Studies

Here are some potential drawbacks of taking an education loan for part-time studies:

1. Limited Loan Options – Many lenders focus on full-time programs, making loans for part-time courses harder to find.
2. Higher Interest Rates – Unsecured loans for part-time courses may have higher interest rates due to increased risk.
3. No Moratorium Period – Some lenders require repayment to start immediately, adding financial pressure.
4. Limited Coverage – Most loans do not cover living expenses, requiring additional financial support.
5. Balancing Work & Repayment – Managing job, studies, and EMIs can be stressful and challenging.
6. Risk of Default – Missed EMIs can result in penalties, a lower credit score, and financial strain on co-applicants.
7. No Immediate Career Boost – Upskilling doesn’t guarantee a salary hike, making loan repayment challenging.
8. Restrictions on Course Changes – Some lenders don’t allow switching courses after loan approval.
9. Income-Dependent Repayment – Monthly EMIs are tied to income, limiting career flexibility.
10. Co-Applicant Requirement – Some lenders may require a co-applicant, adding financial responsibility to another person.
11. Strict Eligibility Criteria – Loans may only be available for recognized part-time programs, limiting options.

Final Verdict: Is Taking an Education Loan for Part-Time Studies a Good Idea?

Taking an education loan for part-time studies can be a great option if:

• The course enhances career growth or helps secure a higher salary.
  
• The borrower has a stable income to manage repayments.
  
• The loan offers flexible repayment options, including step-up EMIs.
  

However, it might not be the best choice if:

• The interest rate is too high or repayment starts immediately without a moratorium.
  
• The course does not offer a significant return on investment.
  
• Balancing work, studies, and loan repayment becomes overwhelming.

Addressing Common Misconceptions

Here are some common misconceptions about education loans for part-time studies and the facts that debunk them:

Myth: “Part-time education loans aren’t as beneficial as full-time ones.”
Fact: They allow professionals to upskill without quitting their jobs, maintaining financial stability while pursuing education.

Myth: “All education loans require collateral.”
Fact: Many NBFCs, including Propelld, offer collateral-free loans, relying instead on creditworthiness and academic performance.

Check out Education Loan Without Collateral: Eligibility & Rates 2025 to explore funding options that don’t require security.

Looking to go for an MBA? Start by understanding the MBA Course Fees 2025: Top Private, Govt Colleges & Scope to get a clear picture of your investment before diving into details about entrance exams, top colleges, and career opportunities.

Why Propelld?

Propelld offers easy and flexible education loans with quick approval and low interest rates. It provides customised repayment options, making higher education more accessible without financial stress.

The following are the primary benefits of Propelld.

FAQs on Education Loans for Part-Time Studies

1. Can I get an education loan for a part-time course?

Yes, but availability depends on the lender. Many banks prioritize full-time courses, while NBFCs like Propelld offer more flexible options.

2. Are tax benefits available for education loans for part-time studies?

Yes, you can claim a tax deduction on the interest paid under Section 80E of the Income Tax Act.

3. Do education loans for part-time studies cover living expenses?

No, most lenders only cover tuition fees and essential study materials. Living expenses are generally not included.

4. When do I need to start repaying my loan?

Unlike full-time courses, many part-time education loans do not have a moratorium period, meaning repayment may start immediately.

5. What are the alternatives if I don’t qualify for an education loan?

Consider employer sponsorships, scholarships, or NBFC loans for more flexible financing options.

6. Can I take a personal loan instead of an education loan for part-time studies?

Yes, but personal loans usually have higher interest rates and shorter repayment terms compared to education loans.

7. How does taking an education loan for part-time studies affect my credit score?

Timely repayment helps build a strong credit history, which can improve your future loan eligibility.

8. How do I choose the best lender for a part-time education loan?

Compare interest rates, repayment flexibility, processing time, and approval rates before choosing a lender.