Career development loans
Career Development loans are loans wherein the government pays the interest for the duration of the course. These loans are available in the UK and are meant for persons, who take up vocational courses that would lead them to jobs at the end of the duration of the course.
How do career development loans work
Persons applying and receiving career development loans do not pay interest during the duration of their course. The Department for Education and Skills, which is a government agency pays the interest during this time and up to one month after the course is completed. A borrower will have to start repaying the loan amount along with the interest thereafter until he pays back the complete loan amount.
Any person, who applies for career development loans, must be above the age of 18 years. The person must also show an intention to work with the EU. Another important criterion which is a must for being eligible for the career development loans is that, the course must be a vocational one. This means that the course should be able to provide the person with skills that would help him get into a new job or make progress in the current job. The courses could be Open University courses or postgraduate degrees. The course may be a full-time, part-time or even a distance course that can last up to a maximum of two years.
Only three banks in UK namely Royal Bank of Scotland, Co-op and Barclays provide career development loans. Although other financial institutions may claim to provide such loans, in reality, they are professional development loans. These lenders may not ask for repayments while you study, but allow the debt to grow making it burdensome, once the course is over and it is time to repay.
Borrowing limit for career development loans
A person can borrow anywhere between £300 and £8000. The amount that a bank allows is usually eighty percent of the course fees, other expenses and living costs for full time students. If the borrower has proof that he has been unemployed for the past three months, he may apply for and receive 100% of the course fees. A person can only apply to one bank at a time for a career development loan. Interest rates for career development loans are quite steep. This means that anyone applying for a career development loan must be prepared to repay the loan amount with interest as soon as he can find a job which is usually within a month of the course being completed. It is highly recommended that the borrower also look at other types of loans such as unsecured personal loans to pay off the career development loan as soon as possible.
Overview
Career development loans, although interest free for the duration of the course, have steep interest rates applicable once the course is finished. The borrower only gets one more month before he starts repaying the loan with interest."> If the borrower fails to get a new job in that one month or does not make any progress in his current job, the resulting financial burden may turn out to be too heavy.
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