Career Development Loan

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The career development loan scheme is a government-initiated lending system of convenient loans for vocational training. During the period of the loan, you will only pay off the interest. Once you are qualified and get a job, you can pay off the rest.

This is a slightly complicated area, because there are two types of career development loan.

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The "official" one is a government sanctioned loan system to encourage people to participate in vocational training. The loan itself is a deferred payment. You can borrow up to £8,000 to fund your vocational training, and during your training the government will pay the interest on the loan. Only afterwards do you start to pay, and you will pay a fixed amount over a pre-arranged term. The exact nature of the loan depends on the length of your training. It's fundamentally a good deal and a concession by the government, so take advantage of it if you wish.

There are officially four banks providing the government's career development loan scheme. Note that to apply for this, the course you are on must relate to a career. There is also a downside, repayments on the loan begin one month after the end of the course so you must be sure of an income immediately after your course, because the money needs to be paid back quickly. In today's economy, this is a big issue.

However, most banks also offer some form of vocational benefits package not just student accounts. Career development loan, vocational training loan and career support loan are all terms to look out for. Deferral schemes are not uncommon because banks are only too aware that student customers tend to become customers for life. So don't just look for the government-supported schemes - there may be other products suited to you.

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