- Three years ago my husband told me he wanted to change careers and get into software engineering.
- We needed around $ 12,000 to pay for a coding bootcamp, so I scrambled to earn some extra cash to cover moving costs and course fees.
- I came a little short and taken out a personal loan about $ 3,700, which I paid back in a few months. It cost me around $ 150 in interest and fees.
- When my husband finished the program he got a job that increased his income by $ 26,000 – a 17,000% ROI on that $ 150 investment.
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Three years ago, my husband threw me for a curl when he became disillusioned with his career choice. We had turned our lives upside down and left our horror house in Alaska across the country so he could study construction management at Colorado State University.
He hadn’t even graduated yet and wanted to get out. But he’s my accomplice, and I wanted him to be happy, so I got down to business.
Instead of throwing in the towel, I persuaded him to finish his studies by hanging a carrot from a stick: if he had graduated, I would find a way for us to cross the country again so that he can continue another career, this time in coding.
It was a big bet. As a personal finance writer, debt is anathema to me. Still, I still took out a personal loan to fund some of this change, and boy, it paid off big.
Tech jobs pay big, but can also have significant costs
We set our sights on a coding bootcamp in Seattle. I was drawn to the natural environment of the Pacific Northwest, and with the many job opportunities in the tech industry, we thought this would be a better place to settle (again).
Still, the cost was not cheap. Even with a veteran discount, the program costs $ 12,105 for a short, intensive three-month training course.
I had a few years’ deadline, so I saved every penny I could and hired as much work as I could. I was able to save up front for all of our moving expenses. But by the time the coding bootcamp bill came due, I had only saved $ 8,340. I was still missing $ 3,765.
I took out a personal loan
To bridge this gap, I taken out a personal loan for the remaining amount. I opted for a 36 month loan, the shorter term offered, because it had a lower interest rate.
The interest rate they offered me – 12.99% APR – wasn’t phenomenal, but it didn’t matter much as I wasn’t planning on holding this loan for very long. in any event. In fact, I paid it back within a few months, before my husband even graduated from the program.
Our investment was very profitable
We had paid a total of $ 150.74 in interest by the time we repaid the personal loan. From there, we looked forward to it as he started going through job interviews.
Surprisingly, he received a job offer as an entry-level software engineer within three months of graduating from the coding bootcamp. Better yet, his starting salary was $ 26,000 more than if he had gone into construction as planned.
Right after he received his job offer, we celebrated our 11th anniversary by having a weekend in the beautiful but sadly named Cape Disappointment. As we watched the winter storms rock the seas in front of the great lighthouse, we cried: We couldn’t believe it. We did it. The bet was won.
Considering that the loan cost us $ 150.74 and we derived additional income of $ 26,000 from it, that translates into a mind-blowing return of 17,148%. Even if you consider the total cost of the bootcamp (not just the cost of financing the personal loan), it still comes down to a staggering 112% return. I will take this return any day of the week.
How we made our personal loan work for us
Personal loans are not always a route to something better. Many people go into debt using personal loans. But in our case, it worked, and for two reasons.
First, we took the loan as an investment of sorts. We paid for something that would have a big return for us, rather than an asset that depreciated like a computer or a vacation.
We couldn’t use a student loan because coding bootcamps are not accredited schools, and so in this case our personal loan was functioning as a de facto student loan. Take out a personal loan to save money pay off higher interest credit card debt can also be a smart decision.
Second, we have prioritized the refund. An interest rate of 12.99% is not great, and there was no reason to carry the debt longer than necessary. I rushed like the wind to write more articles to pay off the loan well ahead of schedule. If we had only made the minimum monthly loan payments, we would have ended up paying $ 800 in interest, but because we paid it off sooner, we saved $ 650.
The bottom line
It’s been a year since my husband started his career as a software engineer, and he – and our bank account – couldn’t be happier. My husband loves every day more than I have ever seen him, now that he has a job that values him more than his ability to swing a hammer and follow the instructions of a cranky construction superintendent.
Last week we paid off the last of my student loans. We are finally catching up on our retirement savings and making regular progress towards saving to buy a house (the in a good way this time). Taking out a personal loan was a bit of a gamble, but if you do it smartly, it can pay off big.