Career Development Loans

[Kamil]

Hi

I would like to know if any pilot or student pilots have taken a 'Career Developmet Loan' from a bank to assist in their training.

Is it just for 'integrated training' banks give a Career Developmet Loan? Or could it be taken for odular courses?

And while on that note, I would like to know about pilots or student pilots who have commenenced on to integrated training streight after finishing their A-Levels, please if you don't mind, how did you menage to gather all the money? Is it mostly through Loans or maybe parents Mortages? How much are you contributing to it? And how do you go about paying all those debts back. It would be interesting to know.

Thanks!

[clear prop!!!]

Career Development loans can be used for modular training. However, you need to get all the training providers set up at once. At least the ones for which the £8.5k max will be used. The reason for this is that you can only have one CDL on the go at any given time. It’s a bit of a hassle, as the Banks don’t understand the concept of multiple training providers or modules for what is in effect one course. If you persevere you should have no problem.

Now £8.5k only scratches the surface of your training costs. As a result the Bank providing the CDL will want to know where the rest of the money is coming from and may want to see evidence that finance is available for the full course cane be completed, to the point where you are employable and can pay the loan back!

Having said all that the interest rates charged on a CDL are scandalous. From memory they are about 11.5% !!! Yes you do get a holiday on payment but it’s still a very expensive deal. So much for the Government trying to encourage further education. The Bank’s make a fortune on these loans for which the carry no risk as they are underwritten by the Government. On top of the high interest you will find the odd 'account maintenance charge' creeping in as well.

The penalties for early redemption are also onerous. I have one and wish I hadn’t!

Try to find another method of borrowing if you can.

[Kamil]

Cheers mate, you cleared a lot of the mess there.. .The first best idea would be to use up your own savings ofcourse and secondly, relatives come in handy! theres no interst, and then the CDL or personal loans.. .Im only sixteen, so I gotta think of these things. And then repay debts after the airline job.

[Anti Skid On]

Oh to be that young again!

Get hours wherever you can - get in the ATC, go to Uni, making sure it has a Uni Air Squadron, look out for BA cadet schemes, etc..

Best of all, watch these pages!

[Island Hopper]

CDL's are the cheapest money you're likely to find!. .I think it would be better to use your own money first, but if you don't have £30k in your back pocket, and your parents can only help with part of the astronomical cost of professional pilot training, then I think a CDL is a good option.

I have one with Clydesdale. The interest rate is 6.7%; Which is very low really, considering you don't pay the money back for about 2 years,and it doesn't accrue any interest until you start paying it back, and when you do pay it back, it can be in installments over about 56 months.

If you were able to pay the whole lot back at the end of the 2 years, I think you only repay what you borrowed.

So effectively, you can borrow the money interest free for 2 years.

I think I've got the above figures right, but if you're interested then I can check for certain, and give you the CDL Infomation telephone number.

Oh, and I didn't have to state all the training providers I planned to use- just the first one for the JAR theory module.

All this might have changed, but I only got my CDL about a year ago.

IH

[ 01 February 2002: Message edited by: Island Hopper ]</p>

[mjkukin2]

WANNABAPILOT

if you are about to finnish your A-leves i suggest you go on to university..2 reasons for this;

1) you will have something to fall back on if you dont make it.

2) with my student loan i am saving it all as i have stayed at home and going to a university in my home town. so every year i save 3000 there plus 4000 pounds from working all over summer and part time so it works out to be at the end of my degree i have saved at least 28000 grand now thats good. NOTE this only works if you live at home and limit friday nights out and spend less on junk..its all worth it in the end ..I think

[captainkilner]

Wannabapilot,

[captainkilner]

OOOHHHH DEAR ITS BEEN ONE OF THOSE DAYS !!!!

. .Wannabapilot,. . I've just got a 34k proffesional studies loan from the HSBC bank secured on my mum and dad's house , I'm paying it back over 11 years at £360 a month ( you don't have to pay anything back for 18 months ), going to take a year off work and get everything done then go back to work.... hopefully things will start picking up again soon and the minimum hours will drop down again.

Hope this helps , if you need any more info , drop me an e-mail.

:) :) :)

[clear prop!!!]

Island Hopper

I'm not sure on which planet a FLAT rate of 6.7% (which a CDL is) represents the 'cheapest money around'!!!!

That’s an APR of nearly 12%. You will get a better rate on a credit card!!!

I'm interested to hear that the Clydesdale did not want to know in advance which approved training providers you were to use as that same bank required signed forms from 3 of mine! Maybe you had a good branch. However, now they are all handled from a central source.

Have you asked about an early redemption??? ....Don't, as you will enter into loan shark territory!!

[ILS27R]

Yes Tonys done well for the jobseeker (I don't think!!) with his CDL at the very charitable rate of 12.5% APR. You might aswell go to the local loan shark <img src="mad.gif" border="0"> <img src="mad.gif" border="0">

Can someone please point out why the CDL has to be paid straight to the learning organisation. Do they not trust you with the money? This just signifies the 'nanny state' we live in!

Pie, don't understand. How can you possibly save the loan. The very word 'loan' is indicative that you must pay it back. Therefore you can't really SAVE the sum of 28K because its not yours to save-only the interest gained from it!

[mjkukin2]

ILS27R what i mean is that this student loan the rate of interest to pay back on it is in line with 2% per annum approx...(rate of inflation)and we dont have to pay it back till you earn over i think it has gone to 15000 per annum when you have a job after graduation.

now i am putting it in an isa or equivalent so when i have it all at the end of me degree i dont pay anything back as i wont be working ill still be training for my integarted course. only then will i start too pay it back

just for an example my brother took out 3800 last year and he got a letter saying for the year 2000-01 he owes 148 pounds in interest on that 3800.now ill be making a lot more form putting my money in an isa to cover the interest and make a bit more for myself.

i know its a loan but while its in my possesion its MINE. . <img src="eek.gif" border="0"> <img src="eek.gif" border="0"> <img src="eek.gif" border="0">

[mjkukin2]

and it a hell of a lot cheaper than a cdl or any other loan the banks offer

[Kamil]

Thanks guyz!. .I really cant add anything more to it.

No, I havent done my A Levels yet.. .Is it not possible to study for a degree while employed with an airline?

[mjkukin2]

think about it....do you really want to do a degree if you are allready where you want to be...a pilot.personally i wouldnt and they say a pilot is always practising, improving techniques, sim checks,learing etc till his career ends so how would you find the time to a degree especially if you were in a different country every other day

[Flash Heart]

There are training providers about that structure the modular course for their students (such as pilot assist), they help you get the CDL in the first place and then use it to pay for your traning as and when you decide.. . The interest on a CDL is payed by the DFEE for the duration of your training so one way of doing it is to use a CDL to get you started then pay it off with the bigger HSBC loan when you can get one.. . Student loans are also a great way to start saving if you go to uni.. . Good Luck.

[Island Hopper]

Ok,. .I've checked the details of my CDL, and I wasn't far off in my earlier post.

Amount of Loan: £8000. .Government pay interest for 2 years . .(you can ask for an extention of up to 17 months, if your course takes longer than expected)

Then:. .APR: 6.9%

59 monthly installments of £175.66. .final installment of £176.06

Total repaid: £10,540

That's £2540 interest, with the final intallment due seven years after they gave me the £8k. .which, clear prop, is the reason I said it was good money.

Last time I checked the maximum was £8k, not £8.5

Oh, and because I only gave them the details of my first training provider, they put the balance of the loan in an account, for me to withdraw as and when I wish!!

They may well have tightened up on all this by now, but that's my deal anyway.

CDL Info Line: 0800 585 505. .8am-10pm Mon-Sun

IH

[Whirlybird]

I just got mine extended for a third year. It was easy - needed a note from the training provider with the new date of the end of the course, and a letter from me with the reason for the extension. I just said that with the present state of the aviation industry it seemed sensible to be as well qualified as possible, and I wanted to do an instructor's course too; they okayed it within a couple of days.

I've never heard anything about being penalised for early redemption, and I asked several people if there were any snags before I got it. I always planned to pay back the lot at the end of the three years. I had the money, but an interest free loan means my money gains interest.

Individual banks may differ, but not according to what I've heard.

[Island Hopper]

Thanks Whirly,

You've just answered the two queries I was about to raise!

IH

[Megaton]

Department for Education & Skills CDL website:. .<a href="http://www.lifelonglearning.co.uk/cdl/learn.htm" target="_blank">http://www.lifelonglearning.co.uk/cdl/learn.htm</a>

[wingman1]

wannabapilot, . . I got a CDL from Clydesdale. The money went straight to my training provider, no hassle at all, just another 8k in debt!! The rest of the money I scraped from Parents, other loans and little bits and peices here and there.. . I started my training in April 2001 a year after I finished my Highers (Scottish A-Levels), I am in a good situation where I have family business I could jump into if things go wrong, but I have been here for 10 months now and it all seems to be going to plan.. . You can sart your training whenever you want, it just depends on how confident you feel, it would be good to have some qualifications to fall back on if it all goes pear shaped. But in the end it is up to you (or your sponsor!). . Hope I helped, Wingman

[Dusty_B]

Firstly, to wanabapilot, aim to get to University and join a University Air Squadron. The quality of the flying is second to none, and the extra-curicular activities are even better (so I have been told - don't remember half of mine, far too drunk).

A couple of ex-UAS pals ended up getting Business development loads (or such like) to help pay for their ATPL training. The banks don't like you asking for £30-40k without some up-front wonga from you: Say, you find £10-15k, they find the rest.... .However, last month a friend from work split with our company to go it alone. When he started asking about Business loans (he was looking for capital in the region of £40k) he tried it on with the bank, and won:. ."8.5% fixed?", he said, " but my mortgage is only 4%. I could go back to the Halifax and they'd give me that....". .And guess what? The bank offered him a business loan at 4%.... better than that, 4% fixed (unlike the mortgage of course)!

hehe! Nice one!

[Dimitri]

Can you use the CDL to train at BAe Jerez, or are there limitations on training in the uk? . . Thats the place I would like to go, particularly with fixed cost inc accomodation + full board, it would sort out a lot of problems

[wingman1]

Yes, you can be granted a CDL for use a Bae in Jerez, I did with Clydesdale anyway, not sure about the other banks, Wingman

[Easy226]

So is applying for a CDL hard, do most people get the loans if they apply?? Also how do you space out the course with only 8K a year-will it be over about three years???

[clear prop!!!]

Just a few facts to put things in perspective.

One month after you complete your course, your agreement is with the bank, which administered the loan. You start paying interest at around 12.9% on the total amount borrowed. Yes, it’s true that you can get up to 3 extensions of interest free payment up to a maximum of 17months if the **** hits the fan, but lets assume that things go to plan.

Have a look at Barclays site. The clearly state that the interest rate is charged at 12.9% after the interest free period.

Now where all of your above calculations fall down is that modular students don’t normally borrow the full 8k at once. In fact the first module that you can qualify for a CDL is ATPL theory. Now that will only cost you about 3.5k and last about a year. Therefore the interest free amount in that year is not on 8k, on which you will ultimatly pay 12.9% for that years borrowings ( all of the examples quoted by the banks are based on the whole loan being drawn at once)

If you are to use the CDL towards an integrated course or IR, you will technically be liable to pay the loan one month after completion, which will only mean about one year’s free interest. On that deal your ultimate APR is way above the 6.9% quoted.

The idea of replacing the 12.9% loan as soon as the interest free period is over is all well and good. As I said earlier, you ill get a better rate on a credit card!! However, your agreement is with the Bank. If you wish to pay the amount back early, there IS a penalty which varies from bank to bank. This will be anything form 2 to 4 months interest at the full 12.9% and that could be as much as £600.

The scandal of the whole thing is that in this day and age, the Government allow the banks to charge 12.9%, and that my friends is the loan deal to which we have signed up.

Read the small print well!!

[Dotun]

Got the CDL from Royal Bank Of Scotland for me MSc course. Paid it back in full right after the course with no interest. Paid back exactly what I borrowed.

Regards. .Ade

[clear prop!!!]

Ade is right,

I forgot to add that you can pay the loan back in full without penalty PROVIDED, this is done at any time before the end of one month of completing your course. At that time you effectivley move from being a Government customer to being a Bank customer!

Miss that and penalties do apply. I can assure you that this is the case.

[Kamil]

Yes, that is where i want to be, an airline pilot.. .I guess its my parents that see degree as "something" to achieve. I menaged to convince them though. Now I have there full support in my ambition.

[Grandad Flyer]

You can do a degree whilst working as a pilot. Although it depends on what kind of flying you are doing. Working for a regular scheduled or charter company you should have enough time to do a distance degree (OU or similar).

[Easy226]

I was thinking of studying a degree while flying, but i dont know if ill be able to fit it in. I think aeronautical engineering involves quite a lot of lecture, etc. so i dont think i'd have time. . .Also, can you get a CDL. if you are studying at uni??

[Grandad Flyer]

You can get a CDL for a career-related course. So I guess it depends on what course you are doing and how good you are at bulls*itting.. .As mentioned, I am not suggesting doing a full time course whilst working, only a part-time distance learning type course. Usually its impossible to get the same day off each week, so an evening course probably wouldn't work.. .Some Uni's offer modular courses that fit in well with airline work.

[Easy226]

Well flying training is a career related source, so why doesnt everyone get a cdl to fund this??

[Flash Heart]

Aeronautical/Aerospace engineering degrees are very demanding and involve alot of lectures, group project work and picking lecturers brains, you are unlikely to find one suitable for part time. A BSc in Aero Technology or somthing similar will be a better bet for part time in my opinion. . . I would be interested to know what the airlines perspective on this is.

Also apparently Barclays and Clydesdale are getting more stringent about handing out CDL's.