If you’re considering a career change, getting another college degree isn’t always the best choice. But if you want to learn a valuable new skill, there are other options. For example, many people sign up for “coding bootcamp” in order to gain a competitive edge in the tech industry.
But considering that coding bootcamps can cost $10,000 or more, you may not be comfortable (or able to) pay the entire tuition up front.
Luckily, some private student loan companies now offer student loans for coding bootcamp. If you are interested in taking out student loans for coding bootcamp, read on for more information.
What is a coding bootcamp?
Coding bootcamps are web-based courses that prepare students for work as software programmers. Most coding bootcamps are full-time programs that last several months. This is obviously a much shorter timeline than seeking another academic degree. And with programmers in high demand, the payoff in pursuing this lucrative career field can be huge.
If you are interested in coding bootcamp, make sure you choose your program carefully. If possible, investigate job placement rates for graduates of the programs you’re considering so you know it’s worth the investment.
The last thing you want is to spend thousands of dollars and months of your life pursuing something that will not prepare you for the career you are interested in.
Student loans for coding bootcamp
Until the details of a pending federal program are ironed out, those who are interested in student loans for coding bootcamp have a few options from private lenders.
These types of loans differ in several important ways from other student loans. Here’s what you need to know:
1. Loans likely cover the cost of boot camp only
Student loans for coding bootcamp typically max out at the exact amount of tuition only. This means you will not be able to cover other expenses such as course materials using the loan.
Often, these loans also disburse funds directly to the institution to ensure they are being used for their intended purpose. You should have another plan in place to cover these expenses while you’re pursuing the program.
2. Interest begins accruing immediately
Although you may be able to defer payments until after you’ve completed the program, interest on your loan will generally begin accruing immediately. To limit the amount of interest you pay over the life of the loan, it may be a good idea to begin making payments immediately — even if it’s not required.
3. Repayment term is shorter than traditional student loans
While student loans for academic degree programs generally have repayment periods lasting anywhere from 10-25 years or more, student loans for coding bootcamp are likely to be much shorter.
In fact, a repayment term of 1-3 years is common. This means you should plan to pursue employment in your new field as soon as possible and/or have an alternate plan in place to make those payments.
4. You still owe if you don’t finish
As with any student loan, you will still have to repay even if you do not complete the program. However, depending on your lender, there may be additional penalties if you do not complete the program as planned.
Read the terms of your loan carefully prior to accepting it to ensure that you fully understand what you’re getting into.
Additionally, do enough research beforehand to make sure you feel comfortable making such a significant financial commitment. While a high-paying field such as computer programming may sound great in theory, it is not for everyone.
Make sure it is something you will enjoy long-term before investing the time and money necessary to complete a bootcamp. Otherwise, you could find yourself not only unhappy with your career, but in unnecessary debt.
Attending a coding bootcamp is not a decision to make lightly. Crunch all the numbers, make sure you attend a program with a good reputation and high job placement rates, and shop around to make sure you’re getting the best deal on your loan.
A student loan for coding bootcamp may be a better option than taking out a high-interest personal loan, charging your credit card, or depleting your emergency fund. However, you want to have a solid plan for putting your new credential to good use and making your monthly payments upon completion. Good luck!
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