Loans are ideal for those who have an eye to credit rehabilitation and credit health. Given there are a variety of lenders who work with bootcamps, the below questions are important to ask prior to working with any loan provider.
Is a Loan for Me?
Is a Loan for Me?
ASK YOUR LOAN PROVIDER:
What criteria do you use in my underwriting decision?
When will you disclose my final interest rate, APR and any service fees?
How much are my monthly payments?
Will you make me do my own math to figure out my actual costs?
How long will the process take?
What do I need to provide you in support of my loan application?
What happens if I default on my loan?
Can I prepay my loan without penalty?
Do you have hardship options?
Will you give me the best possible rate if I apply on my own?
What happens to my loan in cases of death or bankruptcy?
PRO-TIPS FOR CHOOSING A LOAN OPTION
When thinking about paying for your bootcamp education, you can have a lot of school-sponsored options before you, including multiple lending options. How do you know which one to pick?
1. Understanding short and long-term costs is key.
You’ve most likely picked a bootcamp based upon your envisioned resulting career. An outcomes-focused school will disclose:
Which employers helped to develop their curriculum
How many students graduate on time
How many students are finding in-field job placement within three (3) to six (6) months after program completion
The median starting salary and top job titles of grads
Similarly, an outcomes-focused student lender will disclose the payment options available for your program and details on how they work before you’ve gone through the full application and financing process.
Why? You deserve to know the costs of borrowing funds to pay for your education before you are a step away from enrolling in your program.
Skills Fund offers several flexible payment options so you can make an informed decision on how you’ll pay for your program. You should have a good idea of what the payment process will look like and how long it will take you to pay off your loan - all before you apply to the school or to the lender.
This allows you to make an informed decision on your return on education. You should have a good idea of how much it’s going to cost you to pay for your program, and how long it will take you to pay off your loan - all before you apply to the school or to the lender.
2. Understand your repayment plan in full detail (think payment amounts).
Carve out time to map out the different repayment options available to you and the costs associated with each option. Most lenders will provide loan counseling to help you understand these details or upfront clarity on their site.
3. Choose a payment schedule that works for you.
When you’re choosing a repayment plan, consider the following: will you be able to make payments while you’re in school, or should you defer payments until after you finish your program? The quicker you can start paying off your loan, the less your interest on your loan will compound over the life of your loan. Getting a leg up on payments while enrolled is a great way to lower the interest portion of your full repayments after your interest-only or deferment period.
However, if you know you’ll need the flexibility of making no payments while you’re studying, consider choosing a deferred repayment plan.
Inquire to see if your lender has prepayment penalties, which will provide you the freedom to make extra payments at any point over the life of your loan, should you choose to do so.
4. Find a lender with cosigner options.
Some bootcamp lenders will encourage you to apply with a cosigner to secure a lower rate. Others, such as Skills Fund, will give you the choice. If you’re empowered to change your life and career and can qualify for a loan on your own, you can choose to do that with Skills Fund. Or, if you would like to add a cosigner to help improve your application’s credit health, you can make that choice as well.
5. Understand the relationship between your lender and school.
Simply put, do they both have skin-in-the-game around your success?
6. Understand the details of your loan and compare lenders.
For too many Americans - think 44 million Americans with a growing $1.5 trillion in debt - paying off student loans feels like a never ending battle. With cloudy terms and marketing language that doesn't match the actual experience of lending, we as a society should expect more of our lenders.
And now we can. Skills Fund has flipped the student loan model on its head. Our options are simple and clear, and we help you understand the details all the way through the process. Skills Fund makes it easy for you to compare loan details and choose the option that's best for you, because ultimately, this is about your Return on Education.
We encourage you to do your research and demand details around your rate, estimated APR and payment costs on the front end of your lending experience.
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Originally published November 15, 2018.