Student loans for trade schools

If you’re wondering how much it costs and if loans are a viable option for you, this post will help answer those questions. We’ll also explain how to find and apply for them so that you can start your career as soon as possible with a solid financial base. 

Are trade schools worth it?

Yes, trade school are worth it. Trade schools are generally less expensive and require less time than four year college degrees. Trent Hamm, founder of The Simple Dollar, stated that students who go to trade school graduate with an average $10,000 in student debt. Students who go to college have an average student debt of $36,327 after interest. Trades are highly in demand but it is important to continue your education to remain competitive. In addition, you might be surprised to learn that the average salary of a plumber is $50,000. The average salary of a mechanic is $37,000 and that carpenters make an average annual income of $42,600. 

Trade school loans

Trade school loans are used to fund your trade school education, and these are specialized loans that are not available to students who attend regular colleges and universities. Trade school loans can be used to finance training programs in fields such as mechanics, welding and electrician technology, carpentry, and others. Trade school loans may also be used if you’re already employed in a field that requires specialized education or training but doesn’t have the means or time to get it on your own.  For example, if you’re an electrician who wants to upgrade their skills through an apprentice program but doesn’t have enough money saved up from working overtime hours at night just yet – a trade school loan could help bridge this gap until you’ve saved enough for tuition costs.

Can I get federal student loans for trade school?

How to get federal student loans for trade school

The U.S. Department of Education offers three types of federal student loan:

1. Direct Subsidized loans: Direct subsidized loans are available only to students in undergraduate or trade schools at accredited institutions who have demonstrated financial need. This type of loan allows the government to pay the interest while you are in school, and the six-month grace period after your graduation.
2. Direct Unsubsidized Loans Any student attending an accredited school may be eligible for unsubsidized loans. These loans will require that you pay interest or allow it accrue during school and during the grace period.
3. Direct PLUS Loans Graduates, parents, and professionals may be eligible for a PLUS loan, provided that the school they attend is eligible. PLUS loans have a higher interest rate that federal student loans, but they are still eligible.

You will need to fill out the Free Application For Federal Student Aid (FAFSA) in order to apply for federal student aid. Your FAFSA is used by schools to determine whether you are eligible for federal aid, such as grants or work-study programs.

About private student loans for trade school and how to get them

Federal student loans may not be sufficient to cover all costs of your program, regardless of whether you are eligible. Private student loans for trade schools are available to help you.

Although each lender has its own requirements and criteria, some lenders offer loans to trade schools for career training schools like this one from Sallie Mae.

Private lenders are not likely to offer loans specifically designed for trade schools. However, there are many private loans that you can use to finance your trade school education even though the loan is not specifically designated as such.

Both Sallie Mae as well as College Ave offer student loans geared towards trade schools. You can only get these career training student loans at participating schools. There are additional eligibility requirements and stipulations.

• Each loan has a minimum of $1,000.
• College Ave is available only to degree-granting schools.
• Sallie Mae is a school for students in trade certificate and professional training courses (culinary or technical). at an undegree-granting school.

Sallie Mae Career Training Smart Option Student Loan

• Limits on borrowing:$1,000 minimum up to the total cost for attendance
• Interest Rates: Variable Rates from 5.87%-13.23% as of January 2020
• Repayment Options: Instant repayment, interest-only payments while in school, or fixed monthly payments at $25 while in school

Private loans such as these require different criteria than federal ones. You will need to be a U.S. citizen or a qualifying resident. Credit and income requirements are also required. You may be unable to qualify for career training loans if you have bad credit. A trusted cosigner such as a parent could help you.

You can apply for private student loans online. Most lenders allow you to apply over the phone. Be careful to not borrow more than you actually need. You could be paying high monthly payments for many years after graduation.

So that you don’t end up with too many student loans, weigh the cost of borrowing against the potential salary you will earn in your future career.

Find the best interest rate by looking around

Let’s assume you are eligible for both federal student loans and private student loans . Next, you need to decide which option is best for your situation.

The majority of the time, the answer is straightforward: Find the lowest interest rate.

You should find the lowest interest rate you can, as this will increase your borrowing costs.

Federal student loans have lower interest rates than private loans for many borrowers. For example, all direct loans made after July 1, 2018, and before July 1, 2019, had a fixed rate at 5.05%.

Private student loans for certificate programs have an interest rate that is dependent on your creditworthiness. Higher credit scores are more likely to be approved for a lower interest rate.

You can compare offers by applying to different lenders. Let’s say you want to compare a $10,000 loan with a 10% interest rate and one with a 7.00% rate. This 3 percentage point difference could result in $1,925 more interest charges over 10 years.

Because every lender is different you will need to shop around for the best student loan rate.

Look for flexible repayment terms, too

While obtaining a low-interest rate is important, you should also consider repayment options. Federal student loans offer many options, including income driven repayment or forbearance in cases of economic hardship.

Private lenders are unlikely to offer income-driven repayments, but they may offer multi-year terms. Plus, lenders like Sallie Mae don’t require immediate repayment. While you are in school, you can make interest-only or fixed monthly payments.

This will allow you to pay off some interest and keep the monthly payments small until you graduate and start working.

Because many students are unable to make all payments immediately, this flexibility is important. Learn about your repayment options before you take out a loan.

How to obtain student loans for your trade school education

It can be smart to go to trade school. This can help you get into a lucrative trade career. Before you can get into the profession you want, you must first pay for your education.

Compare rates and terms when choosing a lender to finance your trade school loans. To estimate long-term borrowing costs, you might also use the student loan calculator .

You’ve made the conscious decision to invest in your future by choosing trade school. Make sure you are as thoughtful about your student loans to trade school before signing any financial paperwork.

More about how to choose the right loan for your trade school

Step 1. Determine your budget

Before you take out a student loan, it’s essential to determine if you can afford the payments once they start. You’ll need to figure out how much money you can afford to borrow and then calculate your monthly payment.

Make sure that once your loan is paid off, you’ll still have enough money left over for other expenses (such as rent, food, and utilities). If not, consider taking on less debt or choosing a cheaper school for trade school instead of one with higher tuition costs.

You should also prepare for unexpected expenses; this is why so many people default on their student loans.

It may help relieve some stress if your credit score is high enough so that lenders don’t require collateral from family members or friends who co-sign the loan agreement with them.

Step 3. Compare lenders and find out who you qualify with

• Compare lenders to see who you are eligible with.
• Apply for private student loans by filling out the online application on the lender’s website.
• If you’re denied, try different lenders until one says yes.

You can get loans for trade school and have plenty of options for student loans for trade school.

You don’t have to be a high school or college dropout to take advantage of student loans for trade school. You may find that it’s an affordable way to earn your associate degree and gain valuable work experience and skills that will help you succeed in the workforce.

If you decide on a career path that requires further education, consider getting a bachelor’s degree through an online program from one of the top schools, which all offer low-cost tuition and flexible class schedules.

Conclusion

While you’re getting your education, paying attention to the cost is essential. Student loans for trade schools can help you make this dream come true, but there are some things you should know before applying.

That is, you should always try to find out whether or not an institution offers grants or scholarships before going any further with the process. If they provide financial aid, apply because there’s no reason anyone should have student debt when other options are available.

Other resources:

You can read about my post on medical school student loans.