Career Development Loans
Improving your skillset is a great way to advance your career and give your resume a serious boost. According to a survey of over 50,000 Coursera users who enrolled in one of its massive open online courses, 72% reported career benefits like doing their job more effectively, finding a new gig, or getting a raise.
Maybe you’re looking for something more substantial than a free course but don’t want to commit to enrolling in college and spending a few years earning another degree. Fortunately, there are plenty of opportunities to enhance your skills and several methods to finance your career development.
- Is a career development loan right for me?
- FAQs: Career development loans
- How to choose a career development loan
- 3 personal loans for career development
- The bottom line
Is a career development loan right for me?
Taking out a personal loan may be an option if you’re seriously considering participating in career development. Before heading to the bank or hopping online, however, there are a variety of factors you should consider to determine if a career development loan is right for you:
- Personal loans are a form of unsecured debt, meaning they don’t require any form of collateral, like your home or vehicle, for eligibility.
- The average APR for a personal loan was 33.38% in Q1 2019. Borrowers with credit scores over 720 saw an average of 7.27%. Borrowers with poor credit may see up to triple-digit rates, if they qualify at all.
- Loan terms typically range from one to seven years and require you to make monthly payments.
Before applying for a loan, you should be certain you can afford the cost of monthly payments and that the loan will be worth it. For example, you may ask yourself:
- How large of payments you could afford to make each month
- How long you want to be in debt
- If taking out debt to improve your skills or learn new information will actually help increase your income or lead to new opportunities
FAQs: Career development loans
What is a career development loan?
A career development loan is a way of financing a course or certification that could help further your career. They are an unsecured personal loan you obtain from a lender or bank.
How do I find career development loans?
Banks, credit unions and online lenders offer unsecured personal loans you can use for career development. Shopping around online or at local establishments can give you the best opportunity to find optimal rates on a loan.
Are there any alternatives to getting a career development loan?
You could consider putting cash aside to cover the costs or finding a scholarship or grant. A credit card with a 0% introductory APR is another way to finance your professional development, assuming you can repay the balance in full before the promotional period ends.
What happens if I lose my job?
Some loan providers offer unemployment protection and additional resources like career coaching to assist you during your new job search. They may also postpone your payments temporarily until you get back on your feet.
What credit score do I need for a career development loan?
Some lenders may require a minimum score of 620 to 680. They may also take into consideration your current income, career history and existing debt.
Will my employer reimburse me?
Your employer may reimburse you for the cost of your professional development course, degree or certification, but confirm that before enrolling. Some employers could require you to complete the course in a specific timeframe or receive a high enough grade before compensating you for your expenses.
How to choose a career development loan
Choosing a career development loan comes down to sifting through the details provided by lenders. For example, as you shop lenders, be sure to find out first whether you’d be allowed to use their financing options for postsecondary education. Afterward, you might consider each lender’s credit requirements to ensure you’d be likely to qualify.
When reviewing personal loans, take these factors into account, as well:
- APR: The annual percentage rate is another name for interest. APR is the fee you pay for taking out the loan. You want a loan with the lowest APR possible.
- Terms: A loan’s term refers to how long the loan lasts until you pay it off. Generally, career development and personal loans come with fixed terms that can range from 24 to 144 months.
- Borrowing limits: The maximum amount the lender allows you to borrow. Some lenders will finance you up to $100,000.
- Fees: Loan origination fees are what you pay the lender for the administrative duties like paperwork they have to complete. Fees may range from 1% to 8%, but some loans come with no origination fees.
3 personal loans for career development
|APR||5.99% to 16.19%|
|Term length||24 to 84 months|
|Loan amount||$5,000 to $100,000|
SoFi allows you to quickly find the rate for which you qualify and puts the funds directly into your bank account. The application is all online. No origination fee and no prepayment penalties also help reduce your cost of borrowing and repayment.
SoFi is unique in that it offers unemployment protection if you find yourself out of work. Borrowers can apply for the protection and, once approved, can have their loans put into forbearance. Interest will continue to accrue; however, the protection can provide some much-needed breathing room when you need it the most.
|APR||8.13% to 35.99%|
|Term length||36 or 60 months|
|Loan amount||$1,000 to $50,000|
If you’re in a hurry to get started with a new class, Upstart might be the way to go. According to its website, 99% of its applicants receive funds within one business day of loan approval. Upstart determines your rate based on education history, work experience and credit history. It also offers no prepayment penalties.
One drawback is that Upstart may charge an origination fee of Up to 8.00%. You need a minimum credit score of 600, though borrowers with limited credit history may still be eligible for financing.
|APR||3.49% to 19.99%|
|Term length||24 to 144 months|
|Loan amount||$5,000 to $100,000|
LightStream has some of the lowest rates around, but you need good to excellent credit to qualify for them. You also cannot use the loan for postsecondary education, like college or university classes, but private courses are fair game.
LightStream has a Rate Beat program where it offers rates 0.10 percentage points lower than competing lenders. Keep this in mind when shopping around for loans.
The bottom line
A personal loan for career development could be a great option if you’re looking to take your career to the next level. However, taking on debt to fund a skill that’s not applicable to your career most likely won’t help you grow your bank account. Make sure to carefully consider all your options before deciding on the best career development loan.