Unsecured Loans

[snowy_owl]

Does anyone know the best few places to look for unsecured loans? Ones where you don't start paying back until you're earning money?

At 18 years old i'm new to all the 'lending from banks' thing.


appreciate any help


Snowy_owl

[hollingworthp]

You will struggle with this - you may find a 3 month deferral but all that happens is your first 3 months payments are added onto the loan.

With the potential credit-crunch, banks are going to be even more careful on their lending criteria and there is a cap of 25k for unsecured loans.

HSBC in Oxford and Milton Keynes have relationships with OAT and Cabair respectively and they offer secured loans up to 50k (60k for cadets) and unsecured loans up to 25k and both of these loans are deferred until after you complete your training but this is only for integrated students I believe. If you phone the Cornmarket branch of HSBC in Oxford and speak to James Henton you will find out more about what they do.

I also believe that BBVA will loan to students of some of the UK schools - definitely OAT but not sure about the others.

You are eligible for a Career Development Loan which is a government backed scheme but this is only for a maximum of 8k and only from 3 banks (try google for details of this) and again that is deferred during training.

Hope that helps.

[RS999]

The Hythe branch of HSBC has an arrangement with CTC for financing their Wings Cadet scheme but they won't (as far as I'm led to believe) offer any funds unless you have passed all 4 stages of selection, have a valid JAA Class 1 Medical Certificate and have been allocated a place on a Wings course with CTC. The contact at HSBC in Hythe is Lynda Loveless.:ok:

[snowy_owl]

Thanks for all the help guys. So i take it that HSBC are the people to ask, it's just so hard to find information out on their websites!

Well i'll be going around some banks tomorrow!

SO

[tegwin]

Im just a year or so older than yourself, not earning a great deal....

When I was looking for a loan, the largest unsecured loan I could take out was about 9K...which is not enough to fund a fart let alone a flying addiciton...

The only way around it was to get my parents to act as guarantors....We discussed it and I COULD afford the repayments of a much larger loan but it leaves me with very little (read "none") beer money each month..

Provided I keep up the repayments for the next decade my parents wont loose their house:sad:

[akindofmagic]

My understanding is that unsecured loans for (the whole cost of) flight training are a thing of the past, except for those who make it onto the CTC cadet scheme. I believe that HSBC used to offer "Professional Studies Loans" for trainees at the integrated schools, but this went west a while ago. Anyone with more information is very welcome to correct me however.

[whizzer]

I hear that hsbc still do the loans but i think its only for those on a cabair or oat course. I may be wrong thou !!! :ok:

[Wee Weasley Welshman]

Without being on some kind of scheme the high street banks won't lend you any more than 4 figures under the current banking crisis conditions.

If borrowing is your sum plan then you are in trouble. You would need around £50k of borrowings and that will be costing you AT LEAST £575 to pay back even if you could find any bank that would offer you a 10 year loan at 7% (which you won't).

As a flying instructor you would be doing well to take home £800 a month. Food, petrol, insurance and other essentials would have to come out of the £225 a month left after loan repayment.

You might conceivably starve or freeze to death at this point.

Sorry,

WWW

[dom462]

Anywhere but Northern Rock!!! ;)

[cwatters]

I wonder if your course would be elligible for a Student Loan...

http://www.slc.co.uk/

Worth checking as rates are low and deferred payback.

[Bealzebub]

Some twaddle being advised here.

Banks are in the business of lending, that is what they do. The "credit crunch" is a result of commercial banks being unwilling to make short term credit facilities available to other banks to cover those banks longer positions.

Banks are still making loans, millions every week. Some will be applying better credit checks, and being more choosey about the sort of clients they want on their books. In fact bareing in mind the previous paragraph, banks are already doing this to each other.

The statement that Without being on some kind of scheme the high street banks won't lend you any more than 4 figures under the current banking crisis conditions. is pure nonsense. £9999.? Generally unsecured borrowing has and still is available up to a normal limit of £25,000, providing you have the criteria to satisfy loans of that amount.

Banks are businesses, and like any business they need to profit to survive. They are not some sort of social service, or dream fulfillment charity. They have always worked on a "profit is payment for risk" basis. In other words the cheapest borrowing is offered to the customers most likely to be able to satisfy the contract. As the risk increases so does the cost. For any given individual that risk becomes unacceptable from onset ( application) up to the lending limit.

If you can satisfy the lender that you are a good risk and are likely to repay the borrowing, or a guarantor will repay the borrowing, then you are just as likely to be offerd a loan this month as you were last month. If you are at the "high risk" end of the business, you will very likely find the situation more difficult. However this is the way it should always have been and in reality is no bad thing. In the not too distant past, some people on this forum were advocating "planned bankruptcy" as a way to proceed. A sub prime policy that results in tougher and perhaps more responsible credit markets.

A flying career requires sensible planning and responsible actions as well as a very conservative attitude to risk. If the same attitude is applied to fiscal borrowing, then for most people the same opportunities exist today as did a few months ago.

[Wee Weasley Welshman]

Given that me old Mum sells loans for Barclays I can say with a high degree of confidence that a teenager this week wanting £50k for flying training and not coming through something like CTC wouldn't stand a chance.

Banks really have tightened up their lending. They really really have and its going to get tighter yet.

I note the the good people at LloydsTSB who gaurd the Weasley gold have just sent a letter explaining how overdrafts are to be tightened. And I have an epic credit rating..

I did say a few weeks ago that I think the credit crunch will see fewer dreamers walking through the doors of the flying schools next year.

WWW

[Caudillo]

Perhaps then an unexpected bonus - both for those out there looking for their first flying job, and for those of us already in one. A pinch in pilot supply can only drive up terms and conditions.. well, on second thoughts, it would in any other job!

[Wee Weasley Welshman]

Really? This intrigues me greatly.

Go back a year and most wannabes would struggle to get a Career Development Loan plus £10k for an Any Purpose loan on top. £65k secured against nothing would have been remarkable even before the current turmoil where banks don't want to lend to risky clients.

I am pretty sure that on my six figures I couldn't get Natwest to just lend me £65k...

Enlighten us.

WWW

[bri1980]

Far from another lamb to the slaughter-an interesting financial coup de gras!

I will need 10-15k for my IR/FI, and Nat West didn't say yes or no, but they did say that with the right plans and realsitic objectives this was not an impossible ask. I have been with them for most of a decade.

[Wee Weasley Welshman]

Right. So you ACTUALLY borrowed the money off your Dad who borrowed it off the bank.

Which is ever so slightly different. Ever so slightly.

I hope your Dad understands the risk on return he has made.

Cheers

WWW

[Wee Weasley Welshman]

Northern Rock are on the brink of break up at 130p a share yesterday. All hope of a takeover have disappeared and the spectre of a vulture fund break up and asset strip looms. Shareholders will be lucky to get 30p a share. They traded at over £12 earlier in the year..

Their product was a highly dangerous one. Their 'Together' mortgage was offering 100% mortgages with a 25% non-secured loan on top. So Gary and Tracy Chav were able to buy their nasty terrace for £100k with nothing down and then go and splurge £25k on a new kitchen, sofa, Sky TV and Plasma + luxury holiday. Funny enough now their house isn't worth £125k so they are in negative equity. Plus their lifestyle is grinding to a halt as they cannot refinance their credit cards by remortgaging.

WWW

[RS999]

How does that work for current personal unsecured loan borrowers then? Sorry, but I'm not too hot on financial stuff although have been keeping an eye on Northern Rock as I have an unsecured personal loan with them just now.

[hollingworthp]

RS999 - it won't impact on you in any way. If NR do fold then your loan will be sold on to another company who will retain your terms & conditions / rate etc.

[Wee Weasley Welshman]

Their loan book will be sold on at a significant discount. Everyone knows that they will have a high default rate on their 5 times income lie-to-buy 125% LTV "products".

The sad thing is that people like myself could see this unfolding at NR over a year ago.

WWW

[bri1980]

I think the point that WWW (and I'm sure he will correct me if I'm wrong) is making is that there is a lot of foolish borrowing going on out there, and a few foolish companies allowing it to happen!

B

[Grass strip basher]

I have to admit I am surprised that ANY bank would give a £65k unsecured personal loan... never heard of a loan quite that large before being completely unsecured.... i.e. no collateral at all.
Natwest have a max unsecured loan limit of £25k whatever your credit rating.... go to their website it is as plain as day.... Revilo are you telling the truth the whole truth and nothing but the truth or do I smell BS??
Is this a loan taken out by your dad's business?? Otherwise everyone would be doing this rather than securing the loan on their parents house..... sorry I don't mean any offence but something smellys fishy about your "Dad's personal unsecured" loan!

[BlueRobin]

I'm at the stage where I need to fund a FI rating but don't want to end up with cashflow issues. A loan would therefore break the payments nicely down into say 250pm over 24 months.

CDLs attract an APR of 12.9%. Yet a quick search on moneysupermarket.com shows I can get a loan on the same terms for about half that rate.

What's the point of a CDL?

[snowy_owl]

CDL - as in career development loan?

Are they not the ones where you borrow the money and don't have to pay it back until you start working?! Like a student loan at uni, except higher interest rates.

Thats how i believe it to be

[Wee Weasley Welshman]

I'd leave an FI rating until Feb/Mar next year - its hard to get a first job as an FI in the depths of winter. Be aware though that it takes a good few weeks to complete the course and thus the accomodation and loss of earnings costs are high.

Northern Rock were a scandal and the Directors should be ashamed. They had a reckless business model of borrowing money to overlend to people with little financial sense. They were all gambling on a house price bubble. That gamble has failed as all gambles do if you keep them going long enough. Reckless lenders like the Rock are bad money that drives out good and I will not be sorry to see their branches closed and assets stripped. I feel sorry for the staff but not for anyone else involved including the shareholders.

I think we can agree that CDL's and unsecured loans for flying training are now much much harder to get and will be smaller in size. Combined with the bank of Mum & Dads main asset (their house) now closing for further business there may well be a drop in the numbers heading for flying school.

This may be balanced by the fact that the coming recession will result in a lot of redundancy. People who receive large redundancy payments have been known to spend them on funding a CPL/IR course as it proves the impetus to make the long contemplated career change.

Cheers

WWW

[Re-Heat]

Their loan book will be sold on at a significant discount. Everyone knows that they will have a high default rate on their 5 times income lie-to-buy 125% LTV "products".
Actually WWW, it is well known among the banks that NR have a lower default rate than the average mortgage bank. Their crisis is not borne of lower lending standards, but inability to fund through money markets.

The directors are not responsible for immoral lending - they are guilty of risky financing of themselves, which occurred in a manner that neither they nor their peers ever envisaged.

Less of the misleading rhetoric please.

[Wee Weasley Welshman]

The Crock has loans and assets worth £113bn (its loan book as of the 13th sept) which NOBODY in the world seems to want to buy despite being asked pretty please by the Bank of England.

They've taken £8bn in emergency cash from the BoE. They are dead in the water. They know it.

The market is judging their lending standards.

WWW

[Bealzebub]

Given that me old Mum sells loans for Barclays

I don't mean to interrupt your stone throwing in the glass house WWW, but your "old mums " employer isn't exactly sqeaky clean either ! Are they ? (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2332477.ece)

[Re-Heat]

No, you fundamentally misunderstand the reasons behind their crisis - unlike many other banks, they are not funded by a vast deposit base, but instead through wholesale money markets and through securitisation of mortgages (packaging them up and selling them onto other funds).

Since nobody is prepared to lend to any other bank in either of those markets, and the outstanding loans it received in the money markets fall due every 90 days or so, it has been unable to fund itself - hence moving to the Bank of England.

The loan portfolio's quality is not is question - and since now the deposit base is secure, there are rumoured to be 4 or so bidders for the bank, including perhaps JC Flowers, the specialist finance investor.


So what does this mean for those who want loans for flying training?

You can try to get a loan in the current market, and will probably find that leading standards at most banks are higher - not only as they themselves have trouble finding the money to lend you, but they (the whole market) were previously too sanguine about the risks you posed to them as a borrower.

This should not hinder too much those who have assets behind them to secure the loans - other than paying higher interest rates to some degree - it does however mean that you may find it harder to fund a modular course, rather than an integrated course that has links to local banks.

[Wee Weasley Welshman]

Re-Heat I'm perfectly aware of the Rocks unusual mode of operation, thanks. Borrowing short term to lend long was always risky and they were always set for a fall as I said in 2006.

Paris, they will of course be sold to someone. An asset stripping vulture fund or a well known bank or they may even just slip into liquidation. If Mr Flowers can pull off a fancy recovery deal like he did with LTCM well then he is genius. But none of that would change the fact that Northern Rock are a busted bank whose loan book will be sold at a discount, whose brand will be killed off and whose branches will mostly close.

Thats already for certain.

My mum retires at Christmas and cheerfully admits that loans have recklessly been pushed at hapless cases with every chance of default and nobody much caring in the bank.

We seem to have been Jedi Mind Tricked into believing debt is wealth in this country. The truth will become painfully apparent in the coming years.

Loans for flying training are already harder to get and they will become harder.

Rightly so given their innate risk.

WWW

[Wee Weasley Welshman]

Who really gives a flying fcuk what bank you dislike blah blah blah this is a forum for apsiring pilots not mortgage advisors get back on topic

Snowy- Most banks will only lend a max of 25k unsecured but apparently hsbc and a couple others will borrow 60k if you are on a recognised flight training scheme. As to weather its secured or not Im unsure

Apsiring? Weather? Im? Oh deary me.

I agree we are wandering off piste for the Wannabes forum when we discuss the finer points of the Northern Rock situation. Nevertheless it is germane to be talking about how the loan industry is changing and will likely continue changing. As most Wannabes need sizeable loans it strikes at the heart of training both on a tactical level (where and how do I get the money) and a strategic one (how many other people will be able to do the same as me).

I suspect tighter lending rules will mean:

a) Fewer Wannabes being able to fund training.

b) An increased proportion choosing Modular.

c) Older Wannabes being advantaged over younger ones by lenders choice.

d) An increased training failure rate as students who suddenly need an extra £5k to finish the course simply cannot get it from anywhere at any cost and thus never make it to license issue.

Cheers

WWW

[Jenson Button]

Over the last 7 years, the cost of living, cost of manufacturing, cost of buying financial services and cost of buying houses has all gone up up up. Whilst debt in real terms has been so cheap that it has been financially better to borrow than to save. Most savers have found that they are actually losing money than making any in the vast majority of savings accounts.
When you have factored in the cost of your gold plated Integrated course, the loss of earnings for 18 months and a type rating - all of this added up will approach 100k. As WWW said, how in the world do you service that borrowing whether from the bank of Mum&Dad or anywhere else ?? A regional F/O - which is where you might start - barely takes home 2k after tax.
Friends in the finance industry are indeed shutting up shop, but the strongest rumours are that the Western world is bracing itself not just for a slowdown but perhaps a recession. Check out http://money.uk.msn.com/Investing/Insight/Special_Features/Moneyweek/article.aspx?cp-documentid=6252186

The US housing market is in free fall and most UK lenders are exposed to that market. The chances of getting any unsecured borrowing at a decent competitive rate are going down the pan.

After 9/11 - the last economic crisis - it took US and European airlines 2-3 years to recover to a pre 9/11 business. Pilot job hiring probably took 4-5 years to fully recover. Watch this space if come winter 2007 there is plenty of discontent ???

Good luck. Its amazing that people have such short memories of the bad financial times.

Jenson Button:}:}

[SlingsbyT67M]

Ok something positive for Prune (I know its an anomaly) as everything else is always so negative. Is it possible to get an unsecured loan to complete a modular course for 35K? Yes it is. I should know I just did it. Hey and guess what its not HSBC either. On the advise of my soon to be school I contacted Natwest Private Banking and on there advise put my heart into a business case and whammooo, I now have the money to do the course. So, stop the nonsense, its possible, you just have to want it bad enough.

In the interest of not advertising for the bank, if you want my private bankers details to see what he can do for you contact me privately.

[Wee Weasley Welshman]

I suspect things will not be easier for those following you now.

WWW

[SlingsbyT67M]

Not quite sure what you mean?

[Wee Weasley Welshman]

I mean that loan application refusals have jumped 30%. I mean that Now, Today, Tomorrow loans are HARDER to get than when you got one.

They will probably get even harder in the next month and the next year.

House prices are CRASHING in America, Ireland and Spain. Thats a fact.

What do you think is about to happen to the UK?

1)House prices level off and the economy has a subdued but OK year. Or.

2)House prices crash and the economy enters recession?

The banks are already deeply in trouble with Northern Rock already needing more emergency loans than the total cost of Trident. There will be more to come.

Your chances of getting a £40k loan for flying training to get a job as an airline pilot with airlines going bust left right and centre are small. For reference, see 2008.

Cheers

WWW

[R T Jones]

The cost of housing in the UK especially the south east has risen at unprecedented rates in the last few years. The house I live in with my parents at the moment was valued at about £110k 10 years ago. A house on the same street is on the market for £300K. It is absolutely ridiculous the rises in house prices and I almost never imagine being able to afford a house in London, where I would like to live. People are being given too much credit, I've heard of mortgages of 6 times people’s salaries. If people cannot afford the houses the prices will drop, simple. It is the banks that continue lending more and more money to people just so they can get on the housing market. The loan arrangement for CTC is obviously unique; I've borrowed the best part of £70k at nearly 9% (unsecured). I’m also concerned about future rate rises as the loan rate is linked to the BoE base rate. I Think I am wondering off topic but just wanted to put across my two cents on the credit situation in Britain. It is out of control...

[Chukkablade]

WWW, in a gesture, simply :D

I'm glad I'm not the only one to have seen all this coming. I sold all my BTL's last year, as I felt then it was in the wind, seems I wasn't wrong. Better a year too early, than a day too late.

Credit is going to get a LOT harder to come by in the coming months, and that will be felt hardest by those who, due to youth, were considered to be a poor credit risk pre credit boom. Anyone else remember those banking practices? Those will be the one's coming back into vogue.

After ten years of Labour endorsed lending though, there are an awful lot of young people who have never seen a recession (it's coming, and it's a biggy), can't imagine what it brings, and aren't used to being told 'No' for anything. Far less a loan to go and fund learning to fly.

The greatest trick the Devil (Brown) ever pulled, was convincing people that they were getting richer when they were actually getting far, far poorer.

A Potemkin Economy indeed. One built on debt, with no substance nor foundation. Interesting times ahead and you can take THAT to the bank.

[Wee Weasley Welshman]

I think tonights Panorama will have opened a lot of Joe Publics eyes to what has been going on up and down the land.

Did you see those whole new apartment blocks in London where 80% have been repossessed and there were nearly tumbleweeds blowing through the streets?

Did you see the Psychiatric nurse on less than £30k a year with no deposit who was given half a million pounds worth of mortgages?

Did you see the two 50 yr old invalids on benefit that were given a 25 year mortgage?

And these are just the examples the BBC could find in a hurry and who provided useful telly interviews. This is rife. If 8% of mortgages are subprime and they all default then its hello house price crash, hello negative equity, hello recession and goodbye to a few airlines in this country.

It may not be as bad as the early 1990's but even if it isn't the days of willing and easy credit for Wannabes has ended and to compound the problem the bank of Mum and Dad will find the God of Mortgage Equity Withdrawel has died.

£70k Integrated Course Sir? With a £20k jet type rating on the end? Hmm, let me see what the computer says...


WWW

[dartagnan]

airlines will damn start to struggle to find pilots nowadays.
shortage start from experienced pilots and now is going down the line to type rated pilots with 0 h.
if we come in a time of recession where banks will take 0 risk with wannabe pilot, I think it s all good for the one who has been fully trained as it wont cost to much for airlines.

(is that English what I am typing?)

[Chukkablade]

(is that English what I am typing?)

It's close enough to do the job Dartagnan.

I'm not sure that the Airlines will struggle to find Pilots. The Pilot Shortage myth has been kicking around since the first seminar I attended on commercial aviation. That was the month after GW1 finished, so that rather dates it. It was bollocks then, it's bollocks now. When the traffic on this board falls to zero because the airlines are camping outside the training school gates to hire graduates, then believe it. Until then, it's all kiddology and grist for the multi million pound machine that is the training industry. The young people with a dream believe it because they want to/need to, to justify getting into horrendous debt.

All that will happen with the credit tightening WWW has pointed out is that those with old money and independant means will have the ability to start those nice integrated courses. Little Johnny Borrowlots will not now be on those courses. People may cry and holler over that, but it's no one's right to be able to actually borrow huge stacks of cash to follow a dream. Sad but true.

However, as WWW has managed to hit the nail on the head squarely with the hammer, those who had planned to be funded by mum and dad treating the family home like an ATM via Mortgage Equity Withdrawl (the eponymous MEW) will find that route firmly closed to them.

MEW is already going to put quite a few old people at risk as they have used the house, when in a rising market, to bale out the juniors who have been merrily hooning the metrosexual lifestyle of 'party now, pay never'. In a falling/stagnating market, it all gets rather more difficult and it may mean a revision to the (shock horror) days of people actually saving up the money to do whatever course enables their dreams. in this case, aviation.

Hard life:{

[docash1983]

I firstly must apologise for asking yet another very like question on a never ending thread. However, currently in my final year at university studying LLB Law expected to get a 1st and then hope to move onto training. Unfortunately like many others the problem is finance. Nor I or my family have a pot to pee in and there is no way of getting any financial support apart from begging the bank to give me the 60k for an APP course at either OAT or Cabair via a good business plan. I’ve read of people being given high unsecured loans from the bank if they have security not of the property kind but with extra strings to their bow, i.e. degree or qualification of some kind. Realistically what is the maximum unsecured loan I as a person with average credit rating but no security whatsoever can roughly expect from the banks? Either way the bank is going to have to lend me more money than my student loan as if I cant get the funding for APP, do my Bar Vocational Course next year and attempt to save and go modular or save and do the APP. However I’m not getting any younger and don’t want to miss the boat!

Any advice would be greatly received.

Docash1983

[Wee Weasley Welshman]

You would be very lucky to get more than £15k of unsecured loan in the current market.

WWW

[Chukkablade]

Docash, good luck. You'll need it to be on your side.

The banks, or any lending institution, will look at you now as someone who has racked up the inevitable student debt getting a Law Degree, and who has now changed his mind about what he wants to do with his life and wants someone else to fund the change. All without either asset nor parental security, and still with a big minus on the balance sheet. Your a risk, and with bankrupcy now easier than ever, not a good risk for the banks. The pay off from letting the 'want it now' generation get out of jail easier is that honest individuals who want to borrow are finding it's harder. Banks do not like to lose money. They like sure things.

As WWW states, you'll be very lucky to get 15k or more, and even then it'll be on a sore interest rate.

The other point to consider is what if you do the gold plated integrated course, and don't get hired at the end of it. Not all do, and their is definate 'Who you know' elements of recruitment into this industry as there is with all others. Thats life, and I wouldn't even say it's wrong. You help your own, after all. So, could you service that sort of Uni+training debt without a flying job of you had to go back to Law?

Credit is getting far, far tighter. I have close family and friends who work in finance at some fairly senior levels (European Controller for a 'household name' financial provider type of level) and so pick up on work chat from them, hence my opinion.

Easiest way to put it. When I cancelled my Abbey National Credit Card a few years ago, they offered me a 20k loan, interest free for 6 months, on the card, if I would retain it. Would that get offered now?

Doubt it.

[docash1983]

Thanks WWW and Chukkablade for your opinions

I know the odds are significantly stacked against me. The law was not done as a career choice, it was done as purely a back up so that if I never managed to get through the aptitude tests or lost my medical I would have options open to me.

Chukkablade, you are absolutely right by the ‘want it now’ element, I am trying to think of every angle in which to get into the industry. I have come to accept that finance for the course is very difficult to come by, and to be fair I’m running out of ideas as to how to combat the colossal financial hurdle. Like I said in my previous post, the BVC option is a viable one which would eventually allow me to pay off my debts and save up through the modular to get to the right hand seat. However like I’ve said this was always the second best option and could take a significantly long time, seeing me in probably another £17k worth of debt.