It cost me $150 to take out a personal loan to help pay for my husband's education, but I was thrilled when it boosted his income by $26,000

Lindsay VanSomerenMar 4, 2020, 23:22 IST

Three years ago my husband told me he wanted to switch careers and pursue software engineering.
We needed about $12,000 to pay for a coding bootcamp, so I hustled to make extra money to cover moving expenses and course fees.
I came up slightly short and took out a personal loan of about $3,700, which I paid off in a few months. It cost me about $150 in interest and fees.
When my husband finished the program, he got a job that boosted his income by $26,000 - an ROI of 17,000% on that $150 investment.
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Three years ago my husband threw me for a loop when he became disillusioned with his career choice. We'd upended our lives and moved from our horror house in Alaska across the country so he could study construction management at Colorado State University.

He hadn't even completed his degree yet, and he wanted out. But he's my partner in crime, and I wanted him to be happy, so I got to work.

Instead of throwing in the towel, I persuaded him to finish his degree by dangling a carrot on a stick: If he graduated, I'd figure out a way for us to move across the country again so he could pursue another career, this time in coding.

It was a big gamble. As a personal finance writer, debt is anathema to me. Yet, I still took out a personal loan to finance part of this whole switch-up, and boy, did it pay off big time.

Tech jobs pay big, but can have big costs as well

We set our sights on a coding bootcamp in Seattle. I was drawn to the natural environment of the Pacific Northwest, and with the abundant job opportunities in the tech industry, we figured it'd be a better place to settle down (again).

Still, the cost wasn't cheap. Even with a veteran's discount, the program cost $12,105 for a brief three-month intensive training.

I had a lead time of a couple years, so I saved every last penny I could and took on as much work as possible. I was able to save up for all of our moving costs in advance. But by the time the bill for the coding bootcamp came due, I'd only saved $8,340. I was still $3,765 short.

I took out a personal loan

To bridge that gap, I took out a personal loan for the remaining amount. I decided on a 36-month loan, the shortest term they offered, because it came with a smaller interest rate.

The interest rate they offered me - 12.99% APR - wasn't phenomenal, but that didn't matter much because I wasn't planning on holding onto this loan very long anyway. In fact, I paid it off within a few months, even before my husband had graduated from the program.

Our investment paid off big time

We'd paid a grand total of $150.74 in interest by the time we paid off the personal loan. From there, we waited with bated breath as he started going out on job interviews.

Amazingly, he got a job offer as an entry-level software engineer within three months of graduating from the coding bootcamp. Even better, his starting salary was $26,000 higher than if he'd gone into the construction field as planned.

Right after he got his job offer, we celebrated our 11th anniversary by taking a weekend trip to the beautiful but unfortunately-named Cape Disappointment. As we watched the winter storms roil the seas in front of the big lighthouse, we cried: We couldn't believe it. We did it. The gamble had paid off.

Considering that the loan cost us $150.74 and we got an extra $26,000 in income from it, that translates into a mind-boggling return of 17,148%. Even if you consider the total cost of the bootcamp (not just the financing costs of the personal loan), it still works out to a jaw-dropping return of 112%. I'll take that return any day of the week.

How we made our personal loan work for us

Personal loans aren't always a route to something better. A lot of people get trapped in debt by using personal loans. But in our case, it worked, and for two reasons.

First, we took out the loan as an investment of sorts. We paid for something that would have a big return for us, rather than for a depreciating asset like a computer or a vacation.

We couldn't use a student loan since coding bootcamps aren't accredited schools, and so, in this case, our personal loan functioned as a de-facto student loan. Taking out a personal loan to save money by paying off higher-interest credit card debt can also be a smart move.

Second, we prioritized paying it off. An interest rate of 12.99% isn't great, and there was no reason to carry the debt for longer than we had to. I hustled like the wind to write more articles to pay off the loan well ahead of schedule. If we had only made the minimum monthly payments on the loan we would have ended up paying $800 in interest, but because we paid it off early, 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 enjoys every day more than I've ever seen him, now that he has a job that values him for more than his ability to swing a hammer and take directions from a cranky construction superintendent.

Last week, we paid off the last of my student loans. We're finally catching up with our retirement savings, and we're making steady progress towards saving up to buy a house (the right 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 time.

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