Career Development Loans

lytefantastic

Career Development loans are deferred payment loans which are intended to help people fund their vocational training. The government pays the interest charge from the beginning of the course until one month after it is completed.

I have been researching these recently and find that the rates of interest charged by the different lenders differ a fair bit.

The APRs quoted on the websites do not help in calculating costs but a direct quote from the lenders: Co-op, Barclays and RBS helps to sort it out. RBS quoted me a loan charge of £1,600 for a 2 year loan on £8,000 which is the maximum available. Co-op quoted a similar £1,586 but Barclays quoted only £1,097.68.

Co-op have been stopped lending by the Learning & Skills Council, who fund the deferred payments, until the new financial year in April.

What I did discover is that early repayment does NOT attract penalties and that if the whole amount borrowed is repaid before the first interest payment is due (that is before then end of the month after the end of the course) then no interest charges are levied.

It is also a matter for the training provider to set the end date for the training. So it is important therefore that the end date should be as close as possible to the time when the qualification is to be awarded. That way with luck you will be earning before the loan repayments become due.

But my thoughts are that with the interest rates on these loans being quite high perhaps it is better to pay off the CDL in full before any interest is due and use a cheaper loan to fund the debt thereafter.

What do you think?

lytefantastic

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1045441846,81288,#basic

What a clot. I have just found the CDL page.

But it seems my thinking was perfect.

Bokken_2

Yes you are right sorry you had to do all that work though.
We have just stoozed our CDL for two years .You can either pay it off in full or pay for it with a 0% credit card and then take your time repaying the credit card.

lytefantastic

It might be a bit difficult to get a credit rating of £8K though on a new credit card.

But it's a good idea.

Bokken_2

lytefantastic wrote:

It might be a bit difficult to get a credit rating of £8K though on a new credit card.

But it's a good idea.

have you got the 8K as ours was quite a bit less than the max.
Get several cards then .Planning and preperation prevents a p... poor performance.
Yes it is a great idea to stooze it but Martin gets the credit for that.

lytefantastic

No £8K yet but that is the plan. I am currently u/e so qualify for the full amount.

I am training to be one of them thar Home Inspectors.