Career training and education can be an incredibly worthwhile investment for someone looking to increase their skills and advance in a field. However, even these relatively inexpensive programs can still cost thousands of dollars, which is an initial investment not everyone can afford to make. If you’re looking for an accessible way to build your career, you may find yourself wondering how you can pay for the training needed and which option is right for you. For those who need to break up tuition into smaller payments, they may have a choice between a student loan vs. payment plan. Whichever one is chosen, though, will depend on each person’s unique situation and which terms they feel most comfortable with. Below, we’ve dived into the difference between the two and how either may work — along with a quiz to help you find the right payment method for you!
Payment plans
Many schools offer payment plan for students who are unable to make the full tuition payment upfront. With these plans, payments are split up and spread out over the duration of a course.
Unlike a loan, a payment plan comes with zero interest, so you’ll only owe the total tuition amount. It also doesn’t require a credit check, which means you won’t have to worry about your credit being impacted either by an initial credit pull or any potential late payments.
However, with this option the payments are usually spread over a much shorter period of time than they are with a loan, so your monthly payments will be higher.
This option is best for students who can afford to make higher monthly payments.
Private student loans
A student loan can be a good option for people who need to make smaller monthly payments, rather than in larger payments or all upfront. While federal student loans may not be available for every education program, many programs might still be able to accept private student loans. Depending on the products available for your program, you may have the choice of full deferral, interest-only deferral, or immediate full repayment.
There are some things you’ll want to keep in mind before taking out a loan, though. Most come with an interest rate, which means you’ll ultimately pay more than the total tuition. And your credit will also be pulled for private loans, so your credit score may be impacted. Most private lenders pull credit upon application — however, Climb only does a hard pull after the loan is funded. This way, you’ll have the opportunity to apply with multiple co-borrowers to view your offers and compare rates!
This option is best for students who would rather make the lowest possible monthly payments, even if it means paying more overall.
Which one should I choose?
First, talk to your school’s administrators to see what’s available for each program. It’s also a good idea to reach out to loan providers for their interest rates, fees, and term length options. Remember, asking questions is key when it comes to weighing a student loan vs. a payment plan. At the end of the day, the more you understand your current financial situation, and how the terms of each product will affect both, the better able you’ll be to make a sound decision for yourself!