Credit for retraining and professional development: A guide to financing your career goals
18 Jul 2025
9
Minutes
Katrin Straub
CEO at nextsure
A career change or further education is an investment in your future that often pays off after just two to three years. But how can the costs for courses and living expenses be managed? This article shows you how to take out a suitable loan for your retraining or further education and what alternatives are available.
The topic in brief and concise terms
A loan for retraining or further education can be financed through either the government-sponsored KfW education loan or a more flexible, credit-dependent instalment loan from a bank.
The entire costs of professional further education, including loan interest, are tax-deductible as business expenses, which significantly reduces the financial burden.
A careful calculation of all costs (course fees, materials, living expenses) and planning for a financial buffer of at least ten percent are crucial for success.
The Key Facts about Continuing Education Funding
An investment in your own education often pays off after just a few years. A loan can be a crucial bridge in this regard. Here are the key points for financing your professional future:
Two main routes: Financing is usually via the state-supported KfW education loan or a traditional instalment loan from a bank.
Government support: The KfW education loan offers favourable terms with often under eight percent interest, but is limited to a maximum of 7,200 euros and subject to specific conditions.
Flexibility with banks: A loan with no specific purpose offers higher amounts and immediate payout but requires good creditworthiness and a regular income.
Tax deductibility: The costs of professional training, including loan interest, can be fully deducted as work-related expenses, which can mean significant savings of over 20 percent.
Risk coverage: With loans for retraining, it's important to realistically assess the financial risk of a possible dropout or delayed job search.
These options differ significantly in their requirements and conditions, making a detailed analysis of your personal situation crucial.
Government support: The KfW education loan in detail
The state supports those willing to further their education with the KfW Education Loan (Program 173), which is granted by the Federal Office of Administration. This loan is specifically designed for the final phase of training or studies and is characterized by particularly favorable terms. You can apply for monthly installments of 100, 200, or 300 euros, up to a total amount of 7,200 euros over 24 months. The application is made independently of parental income and requires 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 have already been passed. A key advantage is the long grace period: repayment in fixed installments of 120 euros per month begins only four years after the first disbursement. This gives you financial leeway for starting your career. However, note that there is no legal entitlement to this program, as the funds are budgeted annually. For more comprehensive financing, such as for a complete distance learning program, this model may therefore not be sufficient.
If the strict criteria of the education loan don't fit, traditional bank loans offer a flexible alternative.
Alternative for more flexibility: The classic installment loan
If the government framework is not sufficient or you require more flexibility, a conventional installment loan is a common solution. Banks often offer such loans from as low as 500 euros, with the payout made as a lump sum directly into your account. This is ideal for covering high course fees, such as those incurred in advanced training to become a master craftsman, in one go. The interest is usually fixed for the entire term, providing you with planning certainty.
The requirements, however, are stricter than with the KfW. A bank checks three key points before approval:
Age of majority and residency: You must be at least 18 years old and have a permanent residency in Germany.
Regular income: A stable salary is the most important security for most banks. Special, stricter rules often apply for an apprentice loan.
Positive creditworthiness: A clean SCHUFA report is essential to obtain a loan on fair terms.
The biggest advantage lies in the free usability and the often higher possible loan amounts of over 50,000 euros. A thorough household budget calculation in advance is crucial to realistically assess the monthly burden. The question now arises, how you concretely calculate the costs for your training.
Needs Analysis: How to Accurately Calculate Your Training Costs
A precise calculation of all incurred costs is the foundation for a suitable loan application. Often, in addition to the pure course fees, other expenses are overlooked, which can quickly add up to several thousand euros. A detailed breakdown protects you from financing gaps during your further education. Consider at least the following four items:
Course and examination fees: This is the largest single item and can range from €1,000 to over €15,000 depending on the provider and qualification.
Study materials: Specialist literature, software licenses, or special work equipment can cost between €300 and €800 per year.
Travel and accommodation costs: At in-person events, costs of over €100 per weekend can quickly arise.
Living expenses: If you reduce your working hours, you must account for the income difference for rent, meals, and insurance during the duration of your further education.
Our expert tip: Always plan a financial buffer of at least ten percent of the total amount for unforeseen expenses. Once you have determined your financing needs, you can take advantage of tax benefits in the next step to reduce the financial burden.
Expert Knowledge: Maximising Tax Benefits and Reducing Costs
Investing in your professional future is rewarded by the government through tax incentives. The costs of a second vocational training, retraining, or further education can be fully claimed as work-related expenses on the Annex N of your tax return. This applies to all expenses you have personally covered and can reduce your tax burden by several hundred euros per year. Deductible items include not only course fees but also travel costs (30 cents per kilometre for a one-way trip), meal allowances, and expenses for work tools such as a laptop.
It is particularly important that the interest on your further education loan can also be deducted as work-related expenses. Many borrowers overlook this advantage. Therefore, carefully keep all invoices and the loan agreement to be able to present all documents to the tax office if queried. There is no legal limit on the deduction of work-related expenses. Such tax relief makes taking out a loan for retraining even more attractive and can noticeably reduce overall costs. Even financing for a coaching training can be optimised for tax purposes in this way.
Besides financing, securing against unforeseen events is also an important aspect.
Risk Management: What happens in the event of termination or job loss?
A loan for retraining is a commitment lasting several years. Therefore, you should consider the potential risks. What happens if you have to discontinue the 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 installments continue, while the expected higher income does not materialize. Credit insurance is often offered as a solution, but it is usually expensive and tied to strict conditions.
A better strategy is to build financial reserves that cover at least three monthly installments of the loan. Also, check the credit agreement terms for options for a free installment pause (deferral). Many banks offer this possibility for one to three months. With the KfW education loan, deferral in case of proven payment difficulties is also possible, but the interest is claimed later. A well-thought-out plan, which also considers a longer career break, significantly reduces the financial risk. A refinancing after starting your career can also be an option to benefit from better interest conditions, as our guide to refinancing study loans shows.
With the right financing and security, your further education becomes a safe investment in your future.
Request a personalised risk analysis now
Career advancement is one of the most important decisions for your professional journey. The right financing is the key to success. Allow our experts to review your insurance situation and financing options for free and receive specific optimisation proposals 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 your studies, has a lower maximum amount (€7,200), and is approved by the Federal Administrative Office. The KfW Student Loan (Programme 174) can finance the entire course of study (up to €650/month), has a higher total amount, and is applied for directly through KfW.
Can I get a training loan even with bad SCHUFA?
With the KfW education loan, SCHUFA is not a factor. However, when it comes to an installment loan from a regular bank, granting a loan with a negative SCHUFA entry is almost impossible, as the credit check is a central criterion.
Does the employment agency cover the costs for every retraining?
No. The employment agency or job center will only support retraining with an education voucher if there is a significant reason, such as impending unemployment, lack of health suitability for the old job, or the new job being a sought-after shortage occupation. It is a discretionary decision.
How do I prove training expenses to the tax office?
Gather all receipts: invoices for course fees, receipts for textbooks and materials, travel tickets or a travel log, accommodation receipts, as well as the loan agreement and your bank's annual interest statements. You must be able to present these upon request.
Can I repay the loan for further training early?
Yes, that is generally possible. The KfW education loan can be repaid early at any time without any charge. For instalment loans from banks, you should ensure the right to make free special repayments is included in the contract to avoid costly early repayment penalties.
What is better: Taking a loan or paying for further education from savings?
If sufficient savings are available, this is the most cost-effective option. However, a loan can be sensible to avoid depleting financial buffers and to stay liquid. Due to the tax-deductibility of the interest, the actual costs of a loan are often lower than expected.
