Important things to consider if you’re considering taking out student loans for trade school
Updated on September 29, 2020
If you’re going to a trade school, you may be wondering if you’ll need to take out student loans. In some cases, the answer to that question is yes. However, it depends on the cost of your trade school education and what you can afford. Here’s what you need to know:
1. If you’re able to pay for trade school out of pocket, this is preferable
Student loans can be a significant expense, which you’ll continue to pay for 10 years or more. Therefore, you should avoid taking them out for trade school if you’re able to. In many cases, the interest on the loans will result in paying twice the amount that you initially borrowed or even more.
2. Some trades require more education than others
Some trades require more education than others, which means that the cost of trade school depends on the field you choose. Fortunately, most trades that require extensive education are well-paid. Therefore, you don’t need to avoid trades that require extensive trade school education, and these fields are often exceptionally lucrative.
3. The amount that you’ll earn after graduation is important to consider
If you will earn a large income after you finish trade school, you’ll be able to take out a more significant loan. For instance, going to a trade school to become an electrician is expensive, but the income that you can expect to earn in the field is often very high. However, if you won’t earn a large amount in your chosen trade, you will need to limit the amount that you borrow.
4. If you can, take out the loan when interest rates are low
Interest rates vary considerably over time, which makes it important to borrow when rates are low. Luckily, interest rates are currently quite low. However, the job market is currently quite slow, but it’s likely to be strong after the pandemic subsides. Therefore, this could be a good time to start a long period of trade school education.