Loan vs Payment Plan

Student Loans vs. Payment Plans: Which Is Right for Your Students?

Even when it comes to relatively inexpensive career training programs, not everyone can afford to make that initial investment of tuition dollars. If you’re looking for ways to help potential students afford access to your programs, here are a couple methods to break up the payment — student loans and interest-free recurring payment plans — as well as what’s different between them and how they will impact your learners.

Interest-free recurring payment plan

Many schools offer payment plan options for students who are unable to make the full tuition payment upfront. With these, payments are split up and spread out over the duration of a course.

Unlike a loan, a payment plan comes with zero interest, so your students will only owe the total tuition amount. It also doesn’t require a credit check, which means they won’t have to worry about their credit being impacted by either 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 their monthly payments will be higher.

For schools interested in utilizing this method, Climb offers interest-free recurring payment options for partner schools — and we handle all collections and payment management, so you don’t have to worry about it!

Loan vs. Payment Plan

This option is best for students who can afford to make higher monthly payments.

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 an option for your program, Climb is able to partner with schools to provide several different loan types. Depending on what you choose, we can offer loans with full deferral, interest-only deferral, or immediate full repayment. Additionally, we also offer 0% APR financing as well as standard interest-bearing loans!

There are some things your students will want to keep in mind before taking out a loan, though. While our 0% interest financing doesn’t, our Climb Loans come with an interest rate — meaning they’ll ultimately pay more than the total tuition. And for both types of loans, their credit will also be pulled for private loans, so their credit score may be impacted. However, Climb only does a hard pull after the loan is funded, so they’ll have the opportunity to apply with multiple co-borrowers to view their offers and compare rates!*

Loan vs. Payment Plan

This option is best for students who would rather make the lowest possible monthly payments, even if it means paying more overall.

Curious how Climb's suite of payment options can increase access for your students?

*Climb performs a “soft” credit pull to evaluate eligibility, but this soft credit check will not affect your credit score. A hard credit pull is only performed once the loan is accepted and funded.

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What to Expect: Realistic Outcomes

Climb’s Comprehensive Access Solution can offer a strategic balance of increased enrollments and upfront cashflows compared to traditional lenders. While no financing solution guarantees 100% collection, our data-driven approach maximizes both upfront cash and long-term repayment rates.

Typical Partner Results:

  • 15-30% of students qualify for Climb Loans with upfront tuition delivered to the school shortly after course start
  • 45-60% of students qualify for 0% APR* payment plans
  • Enrollment increases of 20%+ reported by partner schools**

**Results vary by school and student demographics. This represents performance reported by individual school partners and should not be considered a guarantee of your specific outcomes.

The bottom line: CAS is designed to maximize your net tuition recovery while eliminating the administrative headaches of student financing.

Maximizing Your Results

Pro Tip: Schools that require student deposits and set up automatic payments during enrollment see significantly better repayment performance across all financing options. These simple steps can meaningfully improve your outcomes.

FAQs

We use a comprehensive, AI-driven assessment that goes beyond traditional FICO scores to better serve career training students:

  • Climb Credit Score: Over 150 data points specifically designed for vocational students
  • Debt-to-Income Ratio: Reliable predictor of payment performance
  • FICO Score: Used primarily for interest rate assignment

Key advantages of our approach:

  • Soft credit pull until loan funding (no credit impact during application)
  • The majority of students receive instant decisions
  • Students can apply with co-borrowers directly in the application
  • More accurate placement into appropriate financing products

We use a comprehensive, AI-driven assessment that goes beyond traditional FICO scores to better serve career training students:

  • Climb Credit Score: Over 150 data points specifically designed for vocational students
  • Debt-to-Income Ratio: Reliable predictor of payment performance
  • FICO Score: Used primarily for interest rate assignment

Key advantages of our approach:

  • Soft credit pull until loan funding (no credit impact during application)
  • The majority of students receive instant decisions
  • Students can apply with co-borrowers directly in the application
  • More accurate placement into appropriate financing products

Students are placed into funding brackets (Elite, Standard, Enhanced) based on our AI assessment. Higher-credit students generate higher upfront payments to your school, while students with limited credit are seamlessly directed to our 0% Payment Plan.

These brackets are established using data from over $1 billion in career training loan originations and may be adjusted periodically based on updated repayment trends.

Important note: Regardless of which bracket a student falls into, they are considered fully paid by your school once funded. The student’s repayment obligation exists exclusively between Climb and the student.

Elite Access not available for Computer Science programs. Upfront percentages vary by industry and loan terms.

Once Climb disburses upfront funding for a student loan, that student is considered fully paid by your school. You will not receive any additional payments for that student—the single upfront payment is complete and final.

From that point forward, the student’s repayment obligation exists exclusively between Climb and the student. Your school has zero liability if the student defaults, and you keep the full upfront payment regardless of the student’s future payment performance.

They’re automatically offered our 0% Interest Payment Plan, ensuring no student is turned away while maintaining steady monthly cash flow for your school.

Higher-credit students generate larger upfront payments (75-100% of tuition), while students with limited credit use our 0% APR* Payment Plan for consistent monthly revenue. Both options are risk-free for your school

Absolutely. Climb complements existing payment options like scholarships, employer-sponsored programs, and internal financing.

Absolutely. Climb complements existing payment options like scholarships, employer-sponsored programs, and internal financing.

Typically, within 5-10 business days after your partnership agreement is signed.

Comprehensive onboarding webinar, continuous partner support via AI-assisted chat and live email—and real-time borrower assistance with our live-chat-available student success team.

No. Climb fully manages the administrative responsibilities—your team simply monitors your school’s performance via our intuitive School Portal.

Your school is fully protected either way. For Climb Loans, you keep the entire upfront payment with zero liability. For Payment Plans, you only receive what students actually pay, with no risk to your school.