Raising Funds for Training - Credit Crunch

[fibod]

How is the credit crunch affecting your ability to raise funds for training? Are the HSBC still giving out £30K unsecured professional study loans? Are CTC cadets still able to borrow £70K unsecured? What is your experience? If you have been able to get loans recently, who was it from?

[The African Dude]

HSBC were still lending CTC Wings cadets up to £75,500 unsecured, 2 weeks ago.

[link_142]

£75,000 unsecured? how on earth does that work? i would have thought some kind of security would have to be put in. can anyone please shed some light on this matter please?

:)

[mad_jock]

I suspect and it is a huge suspect that the companys that have links through and are holding some of the risk.

ie if you go to www's welsh boys flying school intergrated it will cost on paper 95k which you take the loan out on. The coarse only costs 45k. But not many folk can pay 95k up front. So if the school takes on some of the risk of the loan the banks think there is a risk which is profitable. The company gets punters and the numbers which turn out to be bad is relatively small everyone still makes a profit.

Which is why the more intergrated peeps go bankrupt the better because these deals will make the banks back out and the over priced product will be priced out the market.

We are due a down turn now and i suspect in the next 24 months there are going to be some wannabies loosing a heap of dosh due companies going tits up.

[Shauna]

Yes this is the main reason that i have had to put my training on hold....im 21 and i live at home therefore i have no property to secure a loan on.

This is music to my ears :D

I must give them a phone on tuesday.

[The African Dude]

The HSBC agreement is unique to CTC Wings cadets, partially due to an agreement with CTC, and partially due to the very low risk associated with their employment record.

Shauna, I also didn't have property to secure a loan on. So I got a degree and started to work as an engineer, did the sums and realised that it would take 5 years before I even had the cash to start, modular wasn't available in Switzerland and the PPL wasn't available in English...:eek:

[Bobs-Your-Uncle]

just imagine what the monthly repayments are on a massive £75k loan with today's interest rates!

Think HSBC pro study loans are 2% above base rate.

my guessing is it would be about £850 per month ?!?!

[A and C]

For the past few years the big training companys have convinced the airlines that "integrated" pilots are the "quality" product and have more or less forced all the wanabes into courses that cost £20,000 more than the same training on a modular course.

Ask your selfs what is the added value that the integrated course gives you over the modular course, the answer is that you are paying a years take home pay for a bit of help getting a job.

Not being able to get yourself into a vast debt cant be bad and the up side is the extra flying you do to get the hours via the modular route will make you a better pilot.

The only people this credit crissis will hurt will be the leaches who are charging £20,000 for bit of careers advice!

The message is clear.......... go modular and save a fortune!

[Philpaz]

If you have the money to hand then Integrated has to be the way forward, everyone on here dribbles on about chasing the dream, well in my dreams the £ sign rarely pops up. As I have said before, if money wasn't a factor then most people would go Integrated simply because the course is structured, well planned and geared soley at getting you in the RHS of a big Jet, which correct me if i'm wrong, is the dream??
Modular is for those of us that want to cut costs, carry on working and do the training at our own pace. Both systems have ups and downs, advantages and disadvantages, the key is which suits you and your situation best.
Anyway, back to the original thread. Raising money for training....I see this asked so often, what are people looking for here? There are no money trees, golden egg laying geese etc... All you have is your own desire and (hopefully) commitment to the cause. If money is an issue then study like mad and get a sponsored place on an integrated course. Alternatively work/save like mad and pay your own way. The final option would be to get the old folks to stump up the cash but i know if my little lass asked, i'd want her to at least attempt one of the above to show her desire isn't just a passing phase.

Paz (modular)

[Yahweh]

Have to agree with Paz on this. If you have the money then clearly Intergrated is the way to go. If you don't, then modular and be glad that you have the option.

[jb2_86_uk]

I was going to get a £74,000 loan from HSBC (Secured). The interest alone added £45k over the repayment period. I told them thanks but no thanks and have found an alternative and much more attractive solution

JB

[concorde747]

so whats the alternative more attractive solution? i need to know.

[mcgoo]

errr, how about getting the same fATPL for 40k rather than 119k:eek:

[jb2_86_uk]

concorde747:

Oh I get by with a little help from my friends ;)

JB

[docash1983]

Ok, this has probably been asked before, although after a search I cannot find the answers I am looking for, I apologise if they seem rather ambiguous in nature. These questions are aimed at people who have done any integrated course, not CTC and OAT specifically, although it would help.

So, your accepted onto an integrated course, OAA, CTC etc. In attempting to secure the funds, you are about to ask someone to put their house up for security, the questions I have are:

Is this a re-mortgage, or is it as I have been lead to believe a loan: 18 months training and 6 month repayment break, whilst the interest is accruing?
If I was to take the full loan £66k OAA, £60 CTC, what are the usual repayments, which you have had to meet per month?
What is the difference between the loan OAA offer and CTC’s bond scheme?
Presuming a job is acquired, after monthly pay minus tax, how is the financial situation, poor but repayments met, or are we living off tins of beans, and struggling to meet the repayments?
What is the realistic prospect of paying off this loan in the time frame that these schools set out 5-6 years?Cheers Docash1983

[Kerosine]

Further from that question by docash1983, are there any FTOs that can ensure you get an loan for the amount (eg £60k) unsecured?

I though someone mentioned Oxford help you obtain a loan but I don't have property to secure it on!

[Wee Weasley Welshman]

Its Soooooo Over. Mortgage Equity Release and unsecured loans of 5 figures are gone. Watch for price reductions at the Integrated schools in the next 6 months.


WWW

[JB007]

If you have the money then clearly Intergrated is the way to go.

I would be very very cautious, throwing lots of money at an intergrated school with large debt behind you...

Consider Modular, a chunk at time...reassessing the market place...Q4 of 2008 could still have alot of experienced pilots looking for work...

[saccade]

If you have the money then clearly Intergrated is the way to go.

I would be even more cautious. Be aware that 58% of the Oxford 'grads' over the past three months went to an airline that does not really care how you obtained your license. The same airline requires you to pay for your type and they reward all your investments and efforts you with an 'brookfield contract' with ZERO security. And again the same airline has an business model which does not appear to be $100 oil proof, and is operating at a loss at the moment.

But I guess it is all about "following dreams, no guts no glory, flying into sunsets" and all these things.

[Wing_Bound_Vortex]

Bobs-Your-Uncle,

Try over £1000 a month on your £75000 loan........ :yuk:

WBV

[Day_Dreamer]

WWW
you have got to be joking, lower prices at a time of higher fuel costs and an ever increasing tax burden, you can imagine an upward trend not down.
OAA have nearly full courses for 2008 with Netjets, Flybe, EPST to name a few customers.
Rumours that BA may enter the fray as well.
And there appears to be an endless supply of persons, prepared to pay the current prices.
FTE also have regular clients who will help fill their courses, the same applies to Cabair.
FTE are Euro driven and with the value of the € going up costs to the humble £ will rise.

USA with poor economic outlook, and a sinking dollar may lower the costs there, but the disadvantage, is the quality control, and the new requirement for instructors to hold the licence that they are required to teach.
How many FAA rated pilots will convert to a JAA approved licence at their expense ?

Watch for increasing prices over the next 12 to 18 months followed by a possible freeze as prices get too high.
The CAA put their prices up each year, maybe we should campaign for them to justify their charges, which are already far to high.

[G-SPOTs Lost]

WWW
you have got to be joking, lower prices at a time of higher fuel costs and an ever increasing tax burden, you can imagine an upward trend not down.
OAA have nearly full courses for 2008 with Netjets, Flybe, EPST to name a few customers.
Rumours that BA may enter the fray as well.

If you think that Flybe. BA & Netjets are payinmg the same prices as Mr 80k Wannabee then think again, if the paltry deposits paid to hold places on these courses are worth less than the money lost in pursueing them then the idea will get dropped like a hot coal.

A change in management, one particular course taking longer to line train "than usual", an increase in fuel cost passed to the Airline, all these things could mean that these courses or schemes just grind to a halt and get pulled - dont forget the great publicity has already been had.

Simulators have been running 5 x 4hr sessions daily for 18 months, trust me it IS slowing down.

Training prices will come down, I was instructing prior to and around 9/11 and I remember my old MD having a vision for our FTO and it was to make £1 and only £1 that year. FTO's are the classic case for being able to go backwards financially at great speed, just when you think it cant get any worse - somebody taxies down a pot hole and has a prop strike.

Cash is king in flight training, stationary airplanes still cost money

[fibod]

Daydreamer

Can you cast more light on your quote "...and the new requirement for instructors to hold the licence that they are required to teach."?

Ta

[fibod]

Is WWW right again? I note that the wording on the OAT and CTC Wings websites have changed; OAT now talks of a secured HSBC loan:

"For UK resident cadets, OAA offers a bespoke HSBC loan programme for all APP FO students. The OAA/NetJets Europe cadets will qualify for a secured loan of up to £60,000, subject to meeting the HSBC standard eligibility requirements."

and CTC are even more vague, where they used to make much of the unsecured lending available though HSBC:

"..you will be required to raise a security bond. There are many ways of raising this bond and your chosen method will be dependent on your own personal financial position. If you have the available funds, you may choose to finance the bond personally. Alternatively, you may wish to obtain loan financing, as many of our applicants do, from one of the major high street banks. As you go through the selection process, CTC will be able to provide further details."

So, have HSBC pulled the rug on these schemes? Is there anyone going through selection at the moment who can provide up to date info?

[heli_port]

£75k unsecured african! no way := please check again. HSBC will lend £50k max secured for the OAA training course and a similar amount for the CTC course (secured). :p

[Kerosine]

CTC offers £75k unsecured, not sure about OAT. I know because I go to sign the papers next week :ok:

[Wee Weasley Welshman]

The wave of personal bankruptcies by cadets/integrated chaps unable to find work in the great airline recession of 2008/9 will result in the total inability of anyone to borrow money to spend on flying training. Use as a guide the current domestic mortgage market.

What this impact will have on the various schemes I don't actually know as every time I try to think it through my head starts to hurt.

In the end, as with house price inflation, if you remove the silly lax lending then prices will drop for training courses. Airlines will have to pay more or go back to sponsoring cadet courses. Times will return to the happy situation of before we elected a socialist government wherein airlines places adverts, ran selection days, picked trainee pilots and then sorted out their training for them before bonding them into the company.

All that lax lending and mortgage equity withdrawal from high house price inflation has done is let sharp minds like Michael O Leary realise that, actually, these idiots are quite happy to borrow the money to train themselves and then work for nothing for a while afterwards. Excellent!

Take away the lending and the MEW'ing and only millionaires children or lottery winners could afford to pay £90k to work for free.

The real world is about to replace the fantasy world that this country has inhabited for the last decade.

It will not be so sunny a place.


WWW

[Lord Flash-Hart]

I cannot comment on CTC/HSBC but as for OAT, HSBC will lend £25,000 unsecured (providing you have solid work experience and can provide a good contingency plan). They will loan £50,000 to a self sponsored integrated student and £60,000 to a cadet. Both of the larger amounts are secured on either a UK property or cash deposit.

The repayments depend on the particular scheme. I am a NetJets Cadet and I will be paying my loan off over 6 years. The repayments will be around £1100 per month but NetJets pay 20,000Euros of your salary as a tax free reimbursement of training costs. This is around £1250 per month and leaves the remaining salary + expenses to live on. Self sponsored students who borrow the £50k are expected to pay it back over 11 years and this brings the payments down to around £650/month.

I am personally in a position that even when paying back such a significant loan, I will still have more money than I have had before and will be doing the job I have always wanted to do.

I have around 10 friends who have gone through the training system over the last few years. They did a mixture of modular and integrated at various FTO's, some sponsored, some self-sponsored. There is no question that the integrated guys found their first job quicker than the modular guys but either way, they are all employed and enjoying it.

Rich.

[Togodumnus]

Did the Groundschool at BCFT finisished Sept 2006 in a class of five, all modular guys. All found work pretty well straight away after finishing their MCC's.

One works for SkyEurope, one for Virgin Nigeria, one is now in Ryanair and the other guy not sure but has been instructing over in the US.