While they may not be cheaper than market-leading personal loans, the particular conditions attached to career development loans make them especially practical for people funding their educations.

A spokesperson for the Co-Operative Bank this week stressed that such loans have “significant benefits” compared to personal loans for those undertaking vocational training.

Andy Hammerton explained: “There are cheaper [personal loans] available on the market; it’s a very competitive market at the moment. But there are significant benefits with this loan, in terms of you don’t have to pay anything for the duration of the time that you’re learning.”

He added: “They are fairly competitive, but by no means at the top end of the market.”

Interest on career development loans during training is paid by the government, and that, Mr Hammerton pointed out, “is what really appeals to people”.

Career development loans are currently only available from Barclays, the Co-Operative Bank and the Royal Bank of Scotland.

Mr Hammerton said these “three players” have been in the market for “a sustained period of time”.

“There have been no new entrants … so there’s nowhere near the competition that you see in the loan market,” he concluded.

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