Career Development Loan Question

cotsvale

Hi

If you take out one of these, am I correct in thinking that you do not start to pay it back until you have finished your course? If so is the interest rate you will eventually pay agreed up front or at the end of the interest free period and if so do they really sock it to you? I would like to hear from someone who is paying one back and what the rate is?
Thanks

Oldernotwiser

I don't know the actual interest rate but the government pays the interest on the loan whilst you're studying.

[Deleted User]

Isn't the interest rate something magnificent like 12% ? I remember looking into them and decided to avoid it like the plague

Torby

any one have up to date figures on this?....or knows of a good link to point to?

who is the main provider of these loans...is it any major high st banks?

Cheers

CLAPTON

google 'career development loans'

Torby

CLAPTON wrote: »

google 'career development loans'

hi Clapton (great name by the way....guitar player?) I think I phrased my post wrong....while google will give you loads of links, I think I was more interested in hearing from someone who has actually got one...or "done it"....my daughter is talking about going down this route....and I'm not sure its the best way....from hearsay.....so if I can get the info straight from the horses mouth so to speak?

cotsvale

Bump Bump Can someone help me and Torby please.

Gingernutmeg

I don't know much about them, but I have a couple of friends who've taken them out in order to study further. I believe that they can only be used to fund certain courses (I *think* that there has to be a 'practical' element, ie you couldn't use it for an MA in English Lit, but possibly could for an MBA etc, although I might be wrong on this). My friends seemed to regard them as something of a 'last resort' because, as another poster has said, although the government pay the interest when you're studying it is at a very high rate which can be something of a shock when you're suddenly having to pay it back.

jimbob_too

Hi, I took out a career development loan for a 1 year MSc course starting in 2004.

If you want the gory financial details then... <digs out forms>...

It was with the Co-Operative Bank, for a total of £4700.00 (£3000 course fees and £1700 towards living expenses), to be repaid by 24 consecutive monthly payments starting one month after the course finished. The total interest on the loan is £628.33 (13.08% APR), so I am making a repayment of roughly £222 a month for 24 months, which I can just about afford, but I will be very glad when I have finished paying the darn thing off! (end of this summer...)

The main advantage of the career development loan is that the you don't have to stress about making monthly repayments during your course, so you can just concentrate on studies. If you don't find employment immediately after finishing your course it is possible to push back the date at which you start paying the loan by up to six months (with the co-op anyway, dunno about the other banks), though I believe this results in a higher interest rate when you finally do start paying back the loan.

Also, I think Martin Lewis recommends in a CDL article elsewhere on the site that a smart money saving move is to take out a CDL but then pay it off in one go with a much lower interest loan, once your course has finished. This advice sounds fine in principle but since having taken out the CDL I have been unsuccessful in every other loan (and also credit card) that I have applied for. I don't know why this is. :-(

Having said the above, I don't regret having taken out the CDL, since the MSc course has had a positive benefit on my career and at the time the CDL was the only practical way to fund the course (I was unable to obtain scholarships, funding from my employer, research grants etc). Sure I could have delayed starting the course for a year or two whilst I saved enough cash to pay up front, but by that stage other factors (such as personal committments) might have made it less likely I would do the course. So the CDL enabled me do the course at the right time for me.

jimbob_too

Oh yeah, in reply to the original question they tell you all the details of repayment amounts and dates on the form that you have to sign before they lend the money.

melbury

Looked into Career Development Loan for my son when he didn't get any AHRC funding for Masters/PHD. I would honestly say to avoid them if you possibly can, the amount you repay is scary and should only be considered as a very last resort.

We managed to scrape through the Masters year and thankfully he has now found a fully funded studentship for PHD. There is no way we could afford to fund him through the three years for PHD.

Further education is a very expensive business and sadly there isn't a lot around in the way of funding. Seems to me that all the money is going to pay to keep kids at school longer (plus other numerous wasteful things but hat is another story) !!! but them I am a cynic!!!