> Carreer Development Loan - UK Guide
In a nutshell
A career development loan allows you to borrow money to pay for some form of formal education/training with repayments deferred until course completion.
Best Loan for
People that want to improve their skills or change careers and that need formal training/education to do so. Career development loans can also be taken out by people who left education with no qualifications.
You can borrow between £300 and £8,000 for career development loans.
This will be pre-agreed with the bank that you choose as your lender. You won't have to make any repayments while undertaking your study/training and the government will cover your interest payments until a month after you are done. Then you will have to repay the loan at a fixed rate of interest as determined by your lender.
A career development loan is an ideal way to learn new skills, improve your current skill-set or to re-train for a new career. Here you will be able to simply get on with learning without having to worry about paying the money back at the same time. You won't have to worry about course fees, living expenses or any other related costs as you can apply for funds for all of these issues.
You'll also benefit from the fact that any interest accrued during your study will be covered by the government and your outstanding loan will be based at a fixed rate for the duration of the loan. So, when you do have to pay it back, you'll get good rates and will be able to fix a budget for yourself.
What to look out for
Career development loans are currently only available through a few approved high street lenders so your choice will be limited to them. They may also insist that you open an account with them before they'll approve your loan application.
There are various restrictions governing who can qualify for this type of loan. So, if you look like you could afford to fund the training you want yourself, then you won't get a career development loan. Career development loans will only fund vocational training for two years, plus one year's practical experience if your course dictates - so, if your course lasts longer than this then you'll have to find the rest of the funding yourself. If the course you want to do isn't vocational (i.e. if it doesn't lead to a specific job/career) then you won't qualify either. Even if do you qualify for a career development loan then you might still need to find some funds yourself. For example, in some cases you will only be able to use your loan funds to cover up to 80% of course fees. And, you have no guarantee that one of the participating banks will approve you for their loans even if you do meet the criteria necessary for a career development loan. If you have a poor credit rating, for example, then you may run into problems here.
If you don't qualify for a career development loan you could take out a personal loan or, if you meet the criteria, investigate student loans.