A career development loan is a loan taken to undergo a study course which would improve one’s job prospects and is granted only for vocational courses. In the United Kingdom these loans are supported by the government in fact, it bears the interest on the loan for the period of the course. However, one can get this loan only if one has resided in the UK for a minimum period of three years and intends to work there or in the European Union after course completion.
Career development loans benefit the borrower as it helps to bear a major chunk of his course costs course related expenditure as well as living expenditure. However, there are some who have faced problems after taking this loan. Some have registered for courses with lesser known institutes which have shut shop midway through the course, leaving the students in the lurch. Not only are they unable to complete the course, they have the problem of paying back the career development loan with interest without having gained anything from it.
A career development loan is an unsecured loan and is covered under the Consumer Credit Act of 1974. According to the Act the receiver of the loan money, that is, the institute, and the lending bank are jointly liable for any misrepresentation or misguidance. But, lenders usually safeguard their interests by getting the borrower to sign certain terms and conditions in the loan contract whereby he is required to repay the loan even under the above mentioned adverse situations. So if the institute shuts down, the lender would not let the borrower to terminate the loan on the basis of the Act. He will cite the loan contract. The borrower can approach a lawyer or the Citizens Advise Bureau and see where he stands. Based on the advice he gets, he can decide his future course of action.