Originally Posted by
MagnumPI
If that's true, that seems absolutely outrageous.
$80,000 debt at 10% compounded interest (assuming compounded annually?) would be $156k in 7 years time. So if you leave after 6 years, you're up for nearly that much?
Or, does the $80,000 'reduce' over than 7 years - like an imaginary repayment/amortisation schedule?
FFS amazes me that kids who supposedly have the ability to do math for aviation CPL/ATPL somehow can't work out how much they're going to ruin their lives with these huge bonds or training debts.
Or you could just stay until 7 years and not worry about 10% compounding interest. Most non mortgage loans have early termination penalties, they want their cut of interest whether you take the term or not. Granted its not the amount specified above, but that's what is in the contract so I suppose you stay the term or pay the penalty.
I think repayments come out of the pilots pay, at a rate that ramps up after 4 or so years, which is the time you are expected to upgrade to command. All stuff you need to sort out with the loan provider at the beginning, before you sign up, not rely on some anonymous forum response.
In any case $105k does not sound all that bad considering around $30k of that will be accommodation, services and food. At $70,000 that's around $470 average per hour for the 150 hours required for a CPL. Most schools are charging almost $500 an hour for dual in PA28 and $700+ for dual in PA44 these days, then there is theory course, test fees, uniform and other sundries that come to around another $10k or more again.
PS You might want to do some research on how much interest an unsecured personal loan will attract given to a person under 25 with sketchy employment and limited credit history.