Cindy Lamothe
3 min read
Thinking about going back to school or picking up a new skill? Whether it’s a degree, a certification or a specialized course that could level up your career, one thing’s for sure: Education isn’t cheap. The Pew Research Center reported that Americans owed about $1.6 trillion in student loans as of June 2024.
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Powered by Money.com - Yahoo may earn commission from the links above.But before you let finances hold you back, there’s one option you might not have considered — taking out a personal loan. It might sound intimidating at first, but it could be a smart move to invest in your future.
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GOBankingRates spoke with Dennis Shirshikov, professor of finance at the City University of New York and head of growth and engineering at Growth Limit, to discuss the benefits of taking out a personal loan to further your education.
Also see 10 key questions to ask before taking out a personal loan.
Done correctly, Shirshikov said a personal loan (structured for the purpose of financing school, of course) can be one of the most underutilized but strategic moves for professional growth.
That can be particularly so for workers looking to upskill in the short term or pivot their career paths. According to Indeed, many industries have some types of certifications, which can help employees earn more money.
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Unlike many student loans, which are often limited to accredited institutions and traditional degree paths, personal loans offer flexibility. They can be used for coding bootcamps, certificate programs, executive education or even specialized one-on-one training that will enable you to command a higher salary or start a business.
“Consider, for example, a client of ours, a marketing analyst who was stuck on her salary who used a personal loan of $12,000 to make a UX design boot camp happen for her,” Shirshikov said.
In under 10 months, the client made the leap to product design and boosted her salary by over $30,000 annually. “And from a financial point of view, that’s a return on investment that would leave any investor green with envy,” Shirshikov said. “When you consider that the interest on the loan was under 10%, the math adds up.”
This type of nontraditional education financing is particularly compelling, according to Shirshikov, because it’s not bogged down by the bureaucracy and restrictions of federal education financing.
