A Complete Guide to Trade School Loans

Everything you need to know about borrowing for trade school.

Trade schools are growing in popularity, and it’s really no wonder why. According to Value Colleges, they cost around $33,000 to complete, while a university degree can easily cost over $120,000. Further, the salary earned from a four-year degree may not justify the cost.

The average yearly salary for a trade school graduate ranges from $40,000 to $58,000, while the National Association of College and Employers says the average salary for a holder of a bachelor’s degree is $50,359.

A university graduate could end up paying four times more for their education than someone who attended a trade school and still make less per year. Even worse, jobs for holders of four-year degrees are scarce, while trade schools prepare students to enter growing job markets.

If you, like many Americans, are considering a trade school, the cost can still be a large chunk to pay out-of-pocket. Being so, here’s everything you need to know about trade school loans.

What are trade school loans?

A trade school—also sometimes called a vocational school, technical college, vocational college, or career center—provides programs that teach the technical skills required to perform the specific tasks of a job.

Programs usually run one to two years. In the end, you may earn a degree or certificate, begin work as an apprentice or journeyman, or prepare for a licensing exam.

Common programs include those for cosmetology, programming, culinary arts, locksmithing automotive repair, construction, home inspection, and many more.

Learn why trade school can be better than college.

Can you use federal student loans for trade school?

One of the general eligibility requirements for federal student aid is that you are enrolled (or accepted for enrollment) in an eligible degree or certificate program at an accredited school. Being so, you can potentially get federal student aid if you choose a trade school and program that are eligible.

You can view the eligible schools on the U.S. Department of Education’s online searchable database, College Navigator. It allows you to search by location, institution type, and award level.

Benefits of federal student aid loans:
  • Low interest rates.
  • Six-month grace period following graduation.
  • Most affordable loan packages available to students.
  • Deferment and forbearance options.
  • Flexible income-dependent repayment options.
Where can you get federal loans?

To apply, you must fill out the Free Application for Federal Student Aid (FAFSA). The Department of Education will use it to determine your income level and the aid for which you qualify.

There are many types of federal aid you may receive including grants, low-interest loans, and the federal work-study program.

Where else can you get trade school loans?

What if the school you choose doesn’t qualify you to get federal student aid, or you need more than federal aid offers you? Don’t worry; you have other options.

Private loans for trade school

Some private lenders extend student loans. However, most of them are designed for undergraduates and graduates. The good news is, that is changing. As the enrollment in trade school has increased, private loans for trade schools have begun to crop up.

Benefits of a private loan for trade school:
  • Can fill the gap between federal loans and education costs.
  • Low or no payments required while in school.
  • Grace period after completing the program.
  • Competitive interest rates.

Personal loans

Many lenders are offering personal loans online. In most cases, you can use the loan proceeds for whatever purpose you want, including trade schools. Going this route, you can choose any school you want without restrictions.

However, the cost of the loan may be more than federal or private student loans, and you will likely have to begin full repayments right away. That being said, the loan amount you can get and its cost will depend on the lender you choose and your financial situation.

Borrowers with well-established credit may be able to get a better deal through a personal lender.

Benefits of personal loans:
  • Loans up to $100,000.
  • No restrictions on the school you choose.
  • Interest rates can be competitive for those with excellent credit.
  • Quick and easy approval online.
  • Many options to compare.
Where can you get a personal loan?

Save time researching lenders and quickly find your best personal loan option here.

SuperMoney has partnered with leading lending partners such as NetCredit, SoFi, LendingPoint, Prosper, Upgrade, Earnest, and more to help you find the best deal available to you.

You simply answer a few questions and then you get competing preapproved offers back in seconds, all without hurting your credit score.

What to look for in trade school loans

Now that you know where you can get loans for trade school, how should you compare them?

Eligibility

First, you need to figure out which loan types you can get. Federal student aid is going to be the best deal usually, so find out if your program is eligible. Next, see if you are eligible for private student loans.

Then, find out if you qualify for personal loans. While your school of choice won’t impact your ability to get a personal loan, other factors like your annual income and credit score will.

Low costs

Once you find out which loans you are eligible for, it’s time to compare how much they will cost you. You will need to look at the loan lengths, repayment terms, interest rates, fees, etc. It’s important to consider the monthly payment cost as well as the overall cost.

Flexibility

Flexibility is also going to be a key factor to consider. If something happens and you can’t pay your loans, it helps when lenders work with you through a hard time. Look into the repayment, forbearance, and deferment options.

Quality servicing

Once you get a loan with a lender, you will need to work with them for many years (usually a decade). It makes sense to choose one with good customer service and helpful staff. Read up on reviews from past customers to see how satisfied they are with the companies you are considering.

How to find the best trade school loan lenders in 4 steps

Now you know your options are and what to look for in trade school loan lender, so here’s how to find the best one for you in four steps.

1. Become aware of your options

It’s important to understand what loan options are available. If you went straight to personal loans without considering any other options, you might miss a lower cost solution available through the federal government.

Further, if you pick a personal loan lender without comparing a few companies, you will likely end up paying too much. So do your research to understand your options.

If you’re attending a school that makes you eligible for federal student aid, fill out the FAFSA first. Then, look into private student loans for trade schools and personal loans.

2. Shortlist lenders

While there aren’t many private student loans for trade schools yet, there are many personal loan lenders. Review and compare the lenders, get preapproved, compare quotes, and shortlist the three lenders that offer you the best deal.

3. Review all loan solutions in-depth

Review all of your options in depth, considering all aspects of the loans. Remember to look at the flexibility, cost, eligibility, and quality of service.

4. Choose the best deal

After all this research, choose the loan(s) that will offer you the best overall value. Keep in mind—your final solution may be a combination of loans.

Find out what rates you can get

Ready to start your research so you can find the best loan for trade school? We can help! Head over to our personal loans review page to compare industry-leading lenders side-by-side.

Further, find your best rates in seconds with SuperMoney’s personal loan engine. We know how time-consuming it can be to do proper research, so we’ve made it much more manageable. With your personal loan quotes, you will be ready to compare all your options to find the best solution.

WEIGH THE PROS AND CONS

Trade school loans can help you finance a lucrative and fulfilling new career. However, they are not for everyone. Here are some things you should consider before you apply.

Pros
  • Loans up to $100,000.
  • No restrictions on the school you choose.
  • Interest rates can be competitive for those with excellent credit.
  • Quick and easy approval online.
  • Many options to compare.
Cons
  • Don't provide all the protections and benefits of federal student loans.
  • Low rates are only available to students with good credit.
  • Typically there isn't a grace period after completing the program.

Where can you get a private loan for trade school?

SuperMoney makes it easier to compare rates and terms for trade school loans without wasting time or hurting your credit score.

Complete one form and let lenders compete over your business.

Our trade school loan offer engine makes choosing career education loans transparent and painless.

See what rates and terms each lender offers without hurting your credit or filling in multiple application forms.

Find the best trade school loan lenders in 4 steps

Now you know your options are and what to look for in trade school loan lender, so here's how to find the best one for you in four steps.

1. Become aware of your options

2. Shortlist lenders

3. Review all loan solutions in-depth

4. Choose the best deal

After all this research, choose the loan(s) that will offer you the best overall value. Keep in mind – your final solution may be a combination of loans.

Get Competing Personal Loan Offers In Minutes

Compare rates from multiple vetted lenders. Discover your lowest eligible rate.

It's quick, free and won’t hurt your credit score