BBVA have been charging a typical margin of 2.5% over Bank of England base rate on their secured loans for pilot training. There are also set up fees and the security must be a property in the UK where there is no more than one existing charge (mortgage) already on the proposed asset (house). That charge and the proposed loan (second charge) shouldn't
in total exceed 60% of the property value.
Once the contract is established the rate is at a fixed margin (currently 2.5%) over the floating (variable) base rate. In other words once the contract is in operation the margin will remain the same and any variation in the interest charged will only be as a result in changes to the Bank of England base rate. However there is nothing preventing the bank from varying the margin for any future contracts.
With this scheme, it is not clear, (possibly because it will vary from individual to individual,) what rate the commercial bank will charge for loans that are not asset based by a suitable property in the UK. In this case the airline (a limited company) is providing a guarantee (by whatever means they have agreed) to underwrite the loan in the event the borrower defaults. The bank may (or may not) consider the risk at a different level to that where it has an asset backed charge in its favour. The marginal interest rate charged might well be higher in this case. The clue is probably in the information on the BA FPP website.
There are a number of ways you can raise the funds to deposit this security bond, for example from your own finances, borrowing from family, or securing a loan. If you’re not in a position to secure an asset-based loan then you could be eligible for our British Airways guaranteed loan scheme. If this is the case, our partner bank will run a thorough check of your credit history. Should this come back clear and you pass the Future Pilot Programme selection process, British Airways could act as your loan guarantor. You will then be able to borrow the money from our partner bank in order to deposit the required security bond with APL. On any loan there is obviously a percentage of interest charged by the lender, but the British Airways guaranteed loan scheme specifically offers a 24-month holiday period before any loan repayments commence. It should be noted however, that it might be cheaper to secure an asset-based loan either through our partner bank or another lender.
This scheme is going to be useful for those succesful applicants who cannot (rather than will not) provide an asset backed security, but still need to borrow these very large sums of money. However it is still likely to require a squeaky clean credit history. I suspect the option is intended as a last resort, rather than an available, elective, and preferred choice of financing.
The rates charged for borrowing are probably going to be tailored to the individual, and not likely to be obvious until someone has gone through this process, and reported back.