Loan for retraining and professional development: A guide to financing your career goals
18/07/2025
9
Minutes
Katrin Straub
Managing Director at nextsure
A career change or further training is an investment in your future that often pays off after just two to three years. But how can you cover the costs of courses and living expenses? This article shows you how to take out a suitable loan for your retraining or further training and what alternatives are available.
The topic in brief and concise terms
A loan for retraining or further education can be financed via the state-subsidised KfW education loan or a more flexible but credit-dependent instalment loan from a bank.
The total costs of professional development, including loan interest, are tax-deductible as work-related expenses, which significantly reduces the financial burden.
A careful calculation of all costs (course fees, materials, living expenses) and planning a financial buffer of at least ten percent are crucial for success.
The key facts about continuing education funding
Investing in your own education often pays off within just a few years. A loan can be a crucial bridge in the process. Here are the key points on financing your professional future:
Two main routes: Financing usually takes place either via the state-subsidised KfW education loan or a conventional instalment loan from a bank.
Government support: With interest rates often below eight per cent, the KfW education loan offers favourable terms, but it is limited to a maximum of 7,200 euros and tied to fixed eligibility criteria.
Flexibility with banks: A loan for any purpose offers higher amounts and immediate payout, but requires good creditworthiness and a regular income.
Tax deductibility: The costs of professional development, including loan interest, can be fully claimed against tax as work-related expenses, which can mean a significant saving of more than 20 per cent.
Risk protection: For loans used to fund retraining, it is important to realistically assess the financial risk of a possible drop-out or a delayed job search.
These options differ considerably in their eligibility criteria and terms, which is why a careful analysis of your personal situation is essential.
State funding: The KfW education loan in detail
The state supports those seeking further education with the KfW education loan (Programme 173), which is awarded by the Federal Office of Administration. This loan is specifically designed for the final phase of vocational training or a degree programme and is characterised by particularly favourable terms. You can apply for monthly instalments of 100, 200 or 300 euros, up to a total of 7,200 euros over 24 months. Applications are made irrespective of parental income and require no collateral, as the federal government provides a guarantee.
However, you must meet certain criteria. Applicants must be between 18 and 35 years old and be in full-time education. For students, this means, for example, that the intermediate examination must already have been passed. A key advantage is the long grace period: repayment in fixed monthly instalments of 120 euros does not begin until four years after the first disbursement. This gives you financial breathing space as you start your career. However, please note that there is no legal entitlement to this programme, as the funds are budgeted annually. For more comprehensive funding, for example for a complete distance learning course, this model may therefore not be sufficient.
If the strict criteria for the education loan do not fit, traditional bank loans offer a flexible alternative.
Alternative for greater flexibility: the classic instalment loan
If the government framework is not sufficient or you need more flexibility, a conventional instalment loan is a common solution. Banks often grant such loans from amounts as low as 500 euros, with the payment made as a one-off lump sum directly into your account. This is ideal for paying high course fees, such as those incurred for further training to become a master craftsman, in one go. The interest rate is usually fixed for the entire term, giving you planning security.
The requirements are, however, stricter than with KfW. A bank checks three key points before approving the loan:
Adult status and place of residence: You must be at least 18 years old and have a permanent place of residence in Germany.
Regular income: A stable salary is the most important form of security for most banks. For an apprentice loan special, stricter rules often apply.
Positive credit rating: A clean SCHUFA report is essential in order to obtain a loan on fair terms.
The biggest advantage is the flexible use of funds and the often higher possible loan amounts of over 50,000 euros. A careful household budget calculation in advance is crucial in order to assess the monthly burden realistically. The question now is how to calculate the costs of your further training in concrete terms.
Needs analysis: How to calculate your further training costs precisely
A precise calculation of all the costs incurred is the basis for a suitable loan application. In addition to the course fees themselves, other expenses are often overlooked, which can quickly add up to several thousand euros. A detailed breakdown protects you against funding gaps during your further training. Take at least the following four items into account:
Course and examination fees: This is the largest single item and, depending on the provider and qualification, can range from €1,000 to well over €15,000.
Learning materials: Specialist literature, software licences or special work equipment can cost €300 to €800 per year.
Travel and accommodation costs: For in-person events, costs of over €100 per weekend can quickly arise.
Living costs: If you reduce your working hours, you must factor in the income shortfall for rent, food and insurance for the duration of the further training.
Our expert tip: Always plan a financial buffer of at least ten per cent of the total amount for unforeseen expenses. Once you have determined your financing needs, you can use tax advantages in the next step to reduce the financial burden.
Expert knowledge: maximise tax advantages and reduce costs
Investing in your professional future is rewarded by the state through tax benefits. You can claim the full cost of a second vocational qualification, retraining or further training as income-related expenses in Schedule N of your tax return. This applies to all expenses you have borne yourself and can reduce your tax burden by several hundred euros per year. Deductible items include not only course fees, but also travel expenses (30 cents per kilometre for the one-way journey), meal allowances and expenses for work equipment such as a laptop.
It is particularly important that the interest on your further training loan can also be deducted as income-related expenses. Many borrowers overlook this advantage. So keep all invoices and the loan agreement safe so that you can provide the tax office with all supporting documents if asked. There is no statutory upper limit for claiming income-related expenses. Such tax relief makes taking out a loan for retraining even more attractive and can noticeably reduce the overall costs. Even financing a coaching qualification can be optimised for tax purposes in this way.
In addition to financing, protection against unforeseen events is also an important aspect.
Risk management: What happens if you cancel or lose your job?
A loan for retraining is a commitment over several years. You should therefore consider the possible risks. What happens if you have to abandon the further training for health or personal reasons? Or if the job search after graduation takes longer than the planned three months? In these cases, the loan repayments continue while the expected higher income does not materialise. Repayment insurance is often offered as a solution, but it is usually expensive and tied to strict conditions.
A better strategy is to build up financial reserves that cover at least three monthly loan instalments. Also check the loan’s contractual terms for options for a free payment break (payment deferral). Many banks offer this option for one to three months. With the KfW education loan, a deferral is also possible if payment difficulties are proven, although the interest will be charged later. A well thought-out plan that also factors in a longer career break significantly minimises the financial risk. Debt consolidation after entering the workforce can also be an option to benefit from better interest rates, as our guide to refinancing student loans shows.
With the right financing and protection, your further training becomes a secure investment in your future.
Professional development is one of the most important decisions for your career. The right financing is the key to success. Have your insurance situation and financing options reviewed free of charge by our experts and receive specific optimisation suggestions tailored to your individual situation.
More useful links
The Wikipedia article provides a comprehensive overview of the topic of retraining.
The Federal Ministry of Justice and Consumer Protection provides the full text of the Vocational Training Act (BBiG) on its platform.
FAQ
What is the difference between an education loan and a student loan?
The KfW education loan (programme 173) is intended for the final phase of training, has a lower maximum amount (7,200 euros) and is approved by the Federal Office of Administration. The KfW student loan (programme 174) can finance the entire course of study (up to 650 euros/month), has a higher total amount and is applied for directly through KfW.
Can I also get a training loan with a poor SCHUFA record?
With a KfW education loan, SCHUFA plays no role. However, with an instalment loan from a conventional bank, lending is virtually impossible with a negative SCHUFA entry, as the creditworthiness check is a key criterion.
Does the employment agency cover the costs of every retraining programme?
No. The employment agency or job centre will only fund retraining with a training voucher if there is a valid reason, e.g. impending unemployment, lack of medical fitness for the current profession, or the new profession is a much-needed shortage occupation. This is a matter of discretionary decision-making.
How do I prove training costs to the tax office?
Collect all supporting documents: invoices for course fees, receipts for specialist books and materials, tickets or a mileage log, overnight accommodation receipts, as well as the loan agreement and your bank’s annual interest certificates. You must be able to present these on request.
Can I repay the loan for the training early?
Yes, that is usually possible. The KfW education loan can be repaid early at any time free of charge. With instalment loans from banks, you should look out in the contract for the right to make free additional repayments in order to avoid an expensive early repayment charge.
What’s better: taking out a loan, or paying for further training from savings?
If sufficient savings are available, this is the cheapest option. However, a loan can make sense in order not to use up financial buffers and to remain liquid. Thanks to the tax deductibility of interest, the real costs of a loan are often lower than expected.
