Should You Take Out A Career Training Loan?
Career training loan and grant payments are what enable thousands of students to attend universities and colleges all over the developed world. The typical university course lasts for a full four years or longer, with many of them stretching beyond five years, and they are usually residential. This means that they are far from cheap, and rare is the individual who is able to pay for such an education out of their own pocket before their career has even started.
The first point which must be made right at the very start is that career training loans are not for anyone who has not carried out thorough research into both the loan system itself, and the course and career that they are intending to train for. Any borrowing involves risk, including the risk that the money will never be paid back because the course simply didn't deliver and there was no job at the end of it. The most important fact to note here is that if you get into serious financial trouble at any stage in your life, you cannot include student loan money in a bankruptcy. This is a commitment which will last a lifetime no matter what happens, so be sure you understand that and can live with it.
If you are prepared to assume the huge risk involved in student borrowing, it is more than likely that you will be able to go ahead with the plan unless you have a negative credit rating. Be absolutely sure that the course you have chosen is the right one for you, because you will only get one chance. If you fail to make repayments on one loan, your credit rating will be ruined and you will no longer be able to borrow money in this way. Borrowing to subsidize learning is something which only makes sense for those who know exactly what they are intending to do, and who have no doubts whatsoever that it is the right choice.
There are alternatives to the career training loan which may make more sense in some circumstances. If you are mature student, you may be able to borrow money in other ways, either by mortgaging a home or using credit cards. These will involve you in paying more interest, and your home will be at risk if you don't meet payments on a loan secured against it. Such arrangements do provide some degree of security in the worst case scenario, because they can at least be included in a bankruptcy. If you are certain that the course is right for you, you may be prepared to assume the extra risk and expense.
Before you even think about borrowing money, you should make sure that there are no career training grants available to you. While it may be true that the majority of university educations have to be funded through borrowing, this is by no means true in all cases. Depending on your circumstances, there may be grants available which you will not have to pay back. To qualify for these, you will usually have to be in a certain minority group or disadvantaged situation, but not always. It all depends on the motivation of the organization forwarding the grant.
If you decide that a career training loan is the right way forward, you may have some flexibility in the terms which are offered. If you are able to pay back more money earlier, you will end up paying less interest in the final reckoning, but if the loan is extended over many years you will get the benefit of inflation reducing the payments in real terms. In most cases, though, you will not have a lot of choice as there is not usually much flexibility in the terms offered with a career training loan.Written by Jason Hobbes.
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