PhysicsWallah secured an NBFC licence from the RBI in September 2025, committing ₹120 crore to directly fund student loans. The move instantly revives fears of an edtech debt trap, echoing BYJU’S aggressive loan practices that forced parents into financial distress. Students signing up face the risk of full repayment even if they drop courses due to illness.
How We Got Here
PhysicsWallah went public in November 2025, and FinZ Finance, its lending subsidiary, started operations in March 2026. Before its direct lending, PW disbursed ₹200 crore to 80,000 students over two years through NBFC partnerships.
The Numbers
- PW’s AI-powered algorithm will underwrite loans primarily based on students’ academic performance, not traditional credit history.
- FinZ Finance plans to allocate 70% of its initial ₹120 crore investment to PW students, with the remainder available to external applicants.
- FinZ Finance offers education loans from ₹15,000 to ₹5 lakh, with repayment tenures ranging from 6 to 24 months.
- PW’s direct lending will put it in competition with existing student loan players like Propelld, Skill-Lync, and Eduvanz.
- Byju Raveendran, founder of the defunct edtech firm BYJU'S, recently received a six-month jail sentence in Singapore for contempt related to loan defaults.
What Happens Next
🇮🇳 Why This Matters for India
For engineering aspirants in Tier-2 and Tier-3 cities like Kota, Lucknow, or Bhopal, the convenience of direct loans from an edtech provider might outweigh the hidden risks.
The Take
The core issue here is the conflict of interest: selling a course and financing it from the same entity. While PW claims AI underwriting based on grades reduces risk, the real winners will be investors betting on recurring revenue streams, not necessarily the students.
Source:
MediaNama ↗