Professional studies loan
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Professional studies loan
Hi
I was reading a post about the HSBC pro studies loan and it spoke about that on loans over £20,000 you have to secure the loan i.e on a house.
I was thinking...
Im 19 with no assets on which to secure a loan so if my parents were to secure the loan on their house and i was to get life insurance, should anything happen to me the insurance payout would surely pay off the loan wouldnt it?
Can anyone see any risks in this as far as my parents are concerned?
They dont want to have any financial risk for obvious reasons.
Thanks in advance
Dave
I was reading a post about the HSBC pro studies loan and it spoke about that on loans over £20,000 you have to secure the loan i.e on a house.
I was thinking...
Im 19 with no assets on which to secure a loan so if my parents were to secure the loan on their house and i was to get life insurance, should anything happen to me the insurance payout would surely pay off the loan wouldnt it?
Can anyone see any risks in this as far as my parents are concerned?
They dont want to have any financial risk for obvious reasons.
Thanks in advance
Dave
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Posts: n/a
Aerofoil,
Make sure you search this subject, it has been covered here before in detail.
I been exactly where you are, though in the end I didn't get the loan.
When I phoned a company that specialised in life insurance for pilots (can't remember their name), they told me that because I was so young (20 at the time), the premium per month would be below the minimum premium that they would charge. So for the minimum premium (£6 per month I think), I was covered for 100K. So if I did all my training, then died, there would be enough money to pay the loan off plus any accured interest. Also they would be enough left for my parents to buy a new car, go on an expensive holiday a few times.....
The other risk is if you get injured to the extent that you lose your medical. Any training you have done will have been paid for but you will not be able to get a job as a pilot. You can get an insurance to cover this as well. I don't know where from.
The other risk that comes to mind is the 'what if I can't get a job?' HSBC will give you a period of time after you finished training until you get a job, but this time is finite (up to 3 years I believe). And in this time interest will be accuring. Obviously you may have to start paying back the loan before you get a job as pilot. If you borrow £40k over 10 years I think its about £450 per month. This is a lot of money unless you've got a well paid job. Also, £450 per month for 10 years is quite a commitment.
Remember that HSBC will want second rights to the house. i.e, if you don't pay the loan back, they will take the house off your parents. Therefore your parents house must have enough equity.
Remember that the forecast for interest rates is to go UP in the next few years. So what you will be quoted now as your repayment per month, will go up each time interest rates go up.
Hope this helps.
Make sure you search this subject, it has been covered here before in detail.
I been exactly where you are, though in the end I didn't get the loan.
When I phoned a company that specialised in life insurance for pilots (can't remember their name), they told me that because I was so young (20 at the time), the premium per month would be below the minimum premium that they would charge. So for the minimum premium (£6 per month I think), I was covered for 100K. So if I did all my training, then died, there would be enough money to pay the loan off plus any accured interest. Also they would be enough left for my parents to buy a new car, go on an expensive holiday a few times.....
The other risk is if you get injured to the extent that you lose your medical. Any training you have done will have been paid for but you will not be able to get a job as a pilot. You can get an insurance to cover this as well. I don't know where from.
The other risk that comes to mind is the 'what if I can't get a job?' HSBC will give you a period of time after you finished training until you get a job, but this time is finite (up to 3 years I believe). And in this time interest will be accuring. Obviously you may have to start paying back the loan before you get a job as pilot. If you borrow £40k over 10 years I think its about £450 per month. This is a lot of money unless you've got a well paid job. Also, £450 per month for 10 years is quite a commitment.
Remember that HSBC will want second rights to the house. i.e, if you don't pay the loan back, they will take the house off your parents. Therefore your parents house must have enough equity.
Remember that the forecast for interest rates is to go UP in the next few years. So what you will be quoted now as your repayment per month, will go up each time interest rates go up.
Hope this helps.
