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A career development loan is a type of loan taken out in order to obtain education relating to a potential career or to achieve advancement in a career path. This term is usually used in the United Kingdom (UK). Numerous courses can be taken using the money from a career development loan, but the course must be vocational in nature. The precise amount of the loan is negotiable, but under certain conditions the loan may cover the entirety of the cost of the course. Paying back the loan can be very difficult, so many people choose not to take out these loans if they must risk not being able to pay them back.
Education can be expensive but is often worth the cost in the long run. A career development loan can help a person obtain education in order to attain a desirable career level. Theoretically, the loan is used to pay for a course that will lead to a job that is lucrative enough to help pay off the loan. When something goes wrong and a job cannot be found, paying off the loan can be extremely difficult.
Generally, a career development loan has no interest for the duration of the course and for a short period afterward. Once that period is up, the person who took out the loan is responsible for paying interest on that loan and paying it off in the manner originally agreed upon. These restrictions will always be outlined by the bank giving the loan before any money is exchanged.
Only certain people qualify for a career development loan. Applicants must be more than the age of 18 and live in the UK. It is often stated that the applicant must intend to work in the European Union, but it would be difficult to penalize a person for taking work elsewhere when no other opportunities are present. Various agencies and banks can help determine if a person is eligible for a loan. It is even possible to find out more about eligibility over the phone.
Not only must a person qualify, but the course desired must qualify as well. Only courses that lead to careers are considered acceptable. The loan can be used to pay not only for course fees, but also for books, rent, and other expenses related to staying in school and obtaining important education.
Whether taking out a career development loan is a good idea in a financial sense depends on the circumstances. Once the loan must be paid back, a person can be in serious trouble if he or she is still unable to find a job. If the qualifications paid for by the loan do not lead to employment, then the loan was essentially wasted, and both time and money will have been lost. Also, interest on a career development loan can be quite high, so it may not be worth the risk.