loans for flying

[wbryce]

Hi guys,

im looking at taking a loan out to push my flying training forward at a considered rate! i wish to complete my PPL this summer and the only way to do this is most likely a loan from the bank!

Just wondering if anyone has experiance with bank loans for training? And if anyones done this for the purpose of learning to fly, or to hour build in some way! can anyone recommend a good bank? Ive never had a loan in my life, i know the bank would answer these questions if i where to apply, but can a loan be paid back quicker than the intended repayments thats agreed? (i dont like the thought of paying for 2 years or so, id wish to pay it back asap, most likely pay more in the winter seasons once the wx grounds us! :} )

[Archard]

wbryce

I am sure a bank overdraft would be cheaper than a loan and these can be reduced or paid off at will. An overdraft is supposed to be for short term borrowing, which is what you are intimating, with the disadvantage being that the bank could call it in at a moments notice, usually when they have some concerns about the ability of the borrower to pay it off. Also, some form of security may be required.

Unlike an overdraft a loan will probably require regular monthly repayments with a view to all being repaid at the end of an agreed period. I believe the banks are not that interested in the use to which money from a loan or overdraft is to be put, as their main concern is in the ability of the borrow to make regular repayments in the case of a loan or to be able to reduce the overdraft steadily in the case of the latter. I am not sure how paying off a loan early would be likely to be viewed, as the regular monthly repayments include an element of interest which will have been calculated on the basis of the loan having been taken out for a fixed period, but I suppose this could be recalculated in the event of early repayment being envisaged.

I hope this might be of some help.

Paul A.

[lightman]

I attempted to do exactly this.. I have zero credit card debt, no kids, no house, a great credit rating and a high disposable income, and I earn a relativly high income for this area. The only debt I have is my truck.
I got rejected by two different banks. Including the (local) bank I have been using and usually keep a high balance.
They both told me I don't have an alternate means of payment.. Ie. stuff they can TAKE to SELL in the unlikely event that I don't pay back my loan.
I understand the concept of collateral.. However I was asking for $2000... THATS IT.. I earn many many times that..

I guess the days of word is bond are long gone.. I even had the bean counter run it by the PRESIDENT of the company who holds a pilot ticket and OWNS an airplane..

Bastards...

W

[Flyin'Dutch']

W,

Depending on your situation the banks may well be more than happy to lend you the money.

They are usually a bit more cautious when it comes to lending to support 'evaporating items' such as holidays, weddings and PPL training.

However if you have to borrow the money for a PPL and pay that back over the next 2 years, how do you intend to keep flying?

What I am trying to say is that is you have to borrow a relatively small amount of money to get there in the first place, are you sure you can afford the repayments AND the cost of the flying afterwards.

The cheapest short term borrowing at the moment is the 0% credit card thing for 6-9 months but beware that the APRs after this period are frightening.

Best bet would be to raise some extra capital by extending a mortgage.

Have fun

FD

[tacpot]

I did a similar thing to what you are proposing to do, except I put the flying onto my credit cards, and when I had got the PPL got a bank loan to clear the credit card bills.

If I was doing it to day, I'd get a 0% Credit Card from someone like the Halifax and put it all on that.

[SuperOwl]

Hi Wbryce,

The way I will be doing it this year goes along the lines of what Flyin'Dutch' and Tacpot suggest. I have been offered a Halifax One Visa card and its 0% for 9 months on both balance tranfers AND purchases.

I know from my own circumstances that I can afford 4 lessons per month out of my wages after all bills are paid and a few nights out, etc. I thought about taking out a loan but if I can borrow for 9 months at no charge then why take out a loan with a fixed APR and term? What I will do is have as many lessons as I can but I will still pay out of my own pocket for the 4 lessons every month putting any extra on my card. By the time the 9 months are up, in theory, I should have taken 36 hours worth of instruction. But, the weather may not allow this.

I need another 35 hours to meet the 45 hour minimum and realistically, I may need a few more before I can pass my skills test. Assuming that I am able to take the required hours within the nine months, as long as I pay for my 4 hours per month, by the time I start paying interest on my card I shouldn't owe that much. If at that point I do have a balance outstanding, I'll probably transfer it to another one offering 0% on balance transfers. Assuming I am allowed to of course.

I don't know what your circumstances are so what I have suggested may not suit you, but if you can get a credit card with 0% APR on purchases for however many months, but still making sure that you pay for any lessons that you would have had anyway, you shouldn't have too much of a problem. Again, if you do have a balance outstanding at the end of the introductory period, get another card. Other than that, should you choose to take out a loan, the cost of a loan may very well have gone down by then.

There is also another benefit of doing it my way, if I don't get to fly often enough due to the weather, the chances are that I won't owe anything on my card when the charges are due to start and as such I may not have actually borrowed anything and should the worst happen, ie I lose my job, I won't need to worry about making x payment for the next y months. Having said that, I have taken out payment protection in case I do owe anything if that happens.

I hope you find an ideal solution to suit your circumstances and good luck with your PPL, however long it takes.

SuperOwl

[FNG]

The credit card companies spot "rate tarts" eventually. Overdraft is better than credit card borrowing but, unlss the training is an investment for the future (in which case better funded by a cheaper secured loian), is it perhaps unwise to borrow to subsidise a hobby?

[Evo]

The credit card companies spot "rate tarts" eventually


Not really - they haven't spotted me, and i've been juggling 0% money for getting on for three years now. Rather boringly i've used the money to offset my mortgage (and can give it back if they ever ask for it) rather than blowing it all on a Stampe, but it still looks like debt. Saved me a hell of a lot of interest though... :)

edit: I agree with FNG about not borrowing to fund a hobby, but if you are thinking of loans Capital One do a 3.9% "for life" credit card. With care it can be used as a very cheap, very flexible personal loan. Without care it can cost you loads though, so caveat emptor.