What is a career development loan?

The aim of the career development loan (CDL) is to help you fund vocational training or any job-related education. It was created by the government to tackle the situation where young people are leaving school and even university with no vocational training or experience that will actually get them a job (what exactly does a media studies degree prepare you for?!). It also helps those who wish to change their career or to gain skills to stop them having to rely purely on unskilled occupations for their income.

The amount you can borrow is between £300 and £8000. The funding can be for anything up to 2 years of learning time. Also, should you need to do work experience as part of your course, that can be funded too, up to one year.

Like a student loan, the CDL is a deferred repayment loan, but is actually more comprehensive. The DfES (Department for Education & Skills) pay your interest on the loan whilst your course is continuing, and will carry on for the first month following the course's end. You then start repaying your loan. Should you finish the course before the date that you have agreed with the loan provider, you will still have to begin repayments a month after the end of when you finish. Your repayments are subject to a fixed rate of interest for the agreed payback period. When you agree the loan, these variables will be fixed.

Unlike a student loan, you have to commence repayments whether or not you are earning an income a month after the course has finished. For this reason, you should make sure that the course is vocationally related and will lead to a job market that is open, and also that you work hard on the course and try to gain from the work experience to make sure you have a job as soon as the course ends, so that the repayments will not be too punitive.

If you decide to go for this scheme, the first thing you should do is find out the course that you would like to go on. Be sure that it leads to a defined career, and that the market for people with the skills that it teaches you is open to new joiners. You should then find out how long the course lasts for and how much it will cost. Once you have gathered together these details, you can approach one of four banks, who have joined together with the DfES. These are Clydesdale, Royal Bank of Scotland, the Co-operative Bank and Barclays Bank.

Finally, even though this is an unsecured loan, you will still need to make the repayments.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

© AskFinancially.com 2008

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