Funding Queries (Merged 2009)

[mattyh1986]

Loan repayments.

Hello, I am currently in the process of applying to train with an FTO. If i am successful I will need to find a way of financing training, I have some personal capitol but not enough to prevent having to borrow money, and still I will need to borrow a substantial amount in the order of approximately £40-50k .

I have thought long and hard and believe that making repayments for 7 years is a small price to pay to access a career I am going to love doing and have always wanted to do. Please don’t questions my motives or box me into the starry eyes dreaming wannabee, I have deliberated long and hard and this is what I want.

I am posting to ask, people who have borrowed money to train, how are they finding managing the repayments. I appreciate the industry is not in a great way at the moment and a lot people are struggling.

Id really appreciate posts from people who have actually borrowed money, for the sake of being to the point and objective, please refrain from posting about your cousins, best friends, brother, I want to hear from people who have borrowed money and are living with it.

Id welcome PM's if people would prefer however I think this is a question a lot of wannabees will have in the back of their mind so any input will be valued. Lets also refrain from debating "is this is a good time to train" that’s a separate matter and I think it would be beneficial to keep to the point of this post.

I'd massively appreciate people feedback.

King Regards,

Mattyh

[Option C]

Hi mattyh, I graduated from an FTO nearly 7 months ago, now working for a UK airline.
When I was going about the process of getting a loan to cover my training I met a number of bank managers etc to discuss the issue. One of them offered me the loan to cover my training and also the option not to have to start paying back the loan until I had a job. Needless to say I took this offer.
I managed to get recruited by my current employers during my final few months of training, but still had to wait a number of months between graduating from the FTO and starting type rating. Thankfully I didn't have to meet loan repayments during this period due to the above arrangement.
Now that I am in a job, I find I can meet the loan repayments, cover other bills and expenses, and still have money left over at the end of the month.
Shop around if you're looking for a loan and see if you can get a similiar arrangement to what I got. You might accumulate a bit of extra interest on the loan but at least you don't have to start repaying the month after you finish training, gives you a bit fo breathing space to get that job. Might be harder to get in today's economic climate granted.
I would say that if you get an airline job at the end of your training you should be able to meet the loan repayments. However that leads on to another topic entirely!
Good luck.

[Groundloop]

Option C, if you graduated 7 months ago you probably arranged your finance about two years ago. Financial arrangents like that are virtually non-existent now with the current "Credit Crunch".

[mdieker]

I took out a loan for an intergrated course approx 5 years ago. It was with a European bank and I am now with a UK charter airline.

At the moment I see just under 1/3 of my salary after tax go to the bank each month. This is meanly due to the pound/Eur exchange rate. I now have a feeling that I paid to much for this career, especially now the novelty has worn off a bit. But I will leave at that.

I have got a clause in my loan agreement that I can pay off 10% of the origional amount each year towards extra repayment without getting charged.

Also when you do go for a foreign bank, think about possible exchange rate implications.

Make sure that everything agreed will indeed be put in writing. My bank told me that when I would find a job, the colateral (my parents house) would be removed from the contract. I got the job and they refused this!

It is standard now to pay for type rating. Get that as an option in the loan agreement as well. If you already have a loan it is very difficult to borrow more, or with a different provider.

At the time I did not have to much choice. I think it will not be any different now. But don't sign up for a deal which will get you into trouble in the future, especially when it will take a while to get a job.

Best of luck

[TheBeak]

a good post from mdieker, that's spot on.

[Leezyjet]

I have some personal capitol but not enough to prevent having to borrow money, and still I will need to borrow a substantial amount in the order of approximately £40-50k .

How old are you ? and are you intending on going integrated or modular ?, as this could make a substantial difference in how much you would need to borrow depending on how much you have already. By shopping around it is possible to save quite a bit of money here and there. Doing the PPL and hour building overseas for example can save you an awful lot, and buying things like the CRP-5 off ebay, where you can get them for 1/2 the price of certain well know suppliers.

I spread my training out over 4 years, going modular and still being able to work, and took out a £25K unsecured loan that costs me roughly £330/month to pay back over 8 years. The rest I funded from a remortgage and savings. My training all in was in the region of £40-45k from ppl right through to MCC.

You have to take into account how you will manage the repayments if you don't walk into a flying job right away, and also remember that if you do have a large loan to fund each month, this also further restricts your options as to whom you can apply for. You would not be able to manage loan repayments of circ £1k/month on a £19k/year f/o salary whilst still having to pay out living expenses too - unless you still live at home with mummy and daddy or live in a tent.

I now have a feeling that I paid to much for this career, especially now the novelty has worn off a bit.

This is an important quote to consider depending on where you are going to train. The novelty will wear off after a while, and when it does, you want as little of your salary going out on a loan re-payment as poss. Also if this is a lifelong career you are planning, then could you not delay training for a few years so you can work and save up some more money so you don't need to borrow as much ?. There are a lot of people flying aeroplanes who started as teens/20somethings and are bored of it by their 30's but still have loans to pay off. This is something you should also think about too.

[tropicalfridge]

You are barking mad if you are thinking of taking out a huge loan for flying training in the current market. Zero chance of a job for at least the next 2 years. Its not what you want to hear I know, but don't do it. Enjoy your PPL flying and wait until things improve.

[Ollie23]

I now have a feeling that I paid to much for this career, especially now the novelty has worn off a bit.

Thats the bit that scares me. 3-4 years into your career and still potentially in debt to the tune of ~30k+ and losing a large chunck of your hard earned pay cheque each month, it must leave you felling bitter.

[42ir]

42ir

I wish you luck I passed out with a F-ATPL/IRT/MCC 1350H T/T 2.5 years ago and work for a Company fixing sluice machines.
Often I go to work and get called the sluice man, I mutter yes thats me but you can call me Captain!
Sit back work and wait but dont you ever never give up!!!!!!!!!
My CPL instructor worked as a dustman, no joke when he told me I proudley thought well that will not happen to me
Its too late now you had your chance to spend your fortune to be a Doctor Solicitor etc the strange thing, that I will never understand is you never see them in a job centre
This determination could well become an aviation requirement
Hope that helps IT WILL COME ONE DAY IF YOU KEEP AT IT!

[A330ETOPS]

I graduated from FTE Jerez last July and i'm finding it really touch paying back the loans. It works out that i pay just £1980 per month when i pool all of my 3 loans together, and have been badly hit like a lot of others, by the poor £/€ rates.

I'm currently working in Dispatch, but unfortunately the pay is and only covers a small amount of my repayments. Not good at all

[EK4457]

Ouch.

Mind boggling figures.

A330ETOPS - how long do you have to pay 2 grand a month for?

I hope it all works out for you.

EK

[BigNumber]

I believe it aposite to review the actual costs of training.

Integrated Training is possibly somewhat more expensive than some posts ( not necessarily this thread ) have suggested!

Factor: 1. Cost of the Course - and extra flying hours possibly?
2. Living Costs for 15 months
3. Lost Earnings in the same period
4. Type Rating Costs / Paying for Line Training

(If you pay for line training then I'd factor a further 6-8 months Lost Earnings and Living Expenses.)

Surely this lot is a commitment of closer to 120K - 150K in 'real terms'? It certainly is not 45K for an integrated student!

Big

[LAX]

a330etops

I admire you for posting and being honest about the reality of your situation. I am sorry to hear it and hope things work out. Sadly you have fallen foul to the spin given out by flight schools and Gordon "the morons" tax and spend polices which have caused the drop in value of sterling.

Let this be a warning to wannabes, many of which seem in denial about the real prospect of leaving flight school with huge debts and no prospect of a decent paying job in the forseeable future - despite advice from those already working in the industry posted all over this website. Such advice seems to be taken as offence and falls on deaf ears.

I would never discourage anyone wanting to train as a commercial pilot, its a great job. I begged, stealed and borrowed to get my first job, but now is not the time to borrow. Save Save Save as much as you can. Go modular, go abroad and do your ppl and hour building as cheap as possible - enjoy the hot weather. Then go to europe, find a decent flight school to do your commercial stuff and leave something in the budget to do a FI course or type rating to land your first job.

And..............theres nothing wrong with the integrated route, if you have the money go for it, just dont spend the banks.

[BigNumber]

Infinitely sensible post LAX, but 'the runaway train' isn't listening.

There remains a huge cultural problem with attitudes to borrowing money; and the harsh responsibilities of then paying your dues. Why save for 5 years working 2 jobs when you can borrow all you need today. Live for now!

'Pay to Fly' schemes feed from this 'easy money' and I for one am glad that the loans are drying up.

[disco87]

The trouble I am having is that I am unsure of when to start training. Ideally i'd like to do it intergrated and start at some point next year, but its difficult to think 2 months down the line rather than a year.

I am lucky as I dont think I will have to take out much of a loan.

[Aerouk]

Sadly thats what happens when we live in a want-want-want society.

People just don't understand what saving is anymore.

[LAX]

disco87

You should start your training whenever you feel its the right time. Timing is everything but we all take are chances

My advice to you is, and i touched on it earlier, I dont blame anyone for wanting to pay for what they percieve as the best training available but make sure you budget to have cash available to land your first job. Dont blow all your reserves getting your fATPL. Unless things take a major change you will need a FI rating, pay for a type rating or live in some hell hole gettin experience flyin in some hot country etc etc.........THAT my friend is what is going to make a difference in the job market. NOT the school where you got your licence. Good Luck.

Mattyh

I dont want to hijack your thread. To your original question. My advice, I worked like a slave abroad for 6 years and earned enough money to pay for my flight training. Now im getting a RETURN on my INVESTMENT. I never paid a penny of interest to the bank. Borrow whatever you feel comfortable with, but make sure that if you dont get a flying job then you can still earn enough money to make the payments. Dont listen to the spin flying schools throw at you and the banks they are associated with. Remember that interest payments - WILL EAT YOU ALIVE - its money out the window. As prevous posters have indicated, and guys i fly with say, the problems come 3 years down the line. They get fed up with paying 1/3 of their salary to the bank. You will want to buy a car (911), a house (to take advantage of flight attendents after a monday night in chicagos) and savings, pension contributions etc etc. Trust me having put the work in, taken the risk you are going to want a life and rewards for your hard work. Many are struggling and fed up with seeing their renumeration dissoppear in interest.

Rather than ask can you cope with the payment, listen to the spin of the FTO's and banks, please please please seek independant financial advice. Good luck to you

[Leezyjet]

The trouble I am having is that I am unsure of when to start training. Ideally i'd like to do it intergrated and start at some point next year, but its difficult to think 2 months down the line rather than a year.

Don't worry about it, I didn't start my ppl until 30, and just finished training at 34. There is plenty of time ahead of you, you are only 21 !!!.

The MCC instructor I had was 71, he didn't even LEARN to fly until he was 41, and still made Captain at Jersey European (or Flybe as they are now known).

You really don't need to rush into it, there will be a job out there somewhere if you are the right person for it even if you don't start training until your 40 !!.

[phillipsmw]

I tried to reduce the size of the loan as much as possible, to make the repayments more managable if I didn't get a job straight away.

My flight training loan was just over £27k, and I had no savings or outside help from the outset. I flew as I earned until reaching PPL/Night/MEP & ATPL theory(Distance learning), whilst in a non-aviation flexible hours job.
The loan then covered a portion of hour building, CPL/IR and MCC.. and all extra living costs. It had a 3 month payment holiday, which ideally coincided with the end of training, and thankfully in my case only a couple of months before getting into the RHS. But I feel that even without the quick job hunt, the lower repayments would have saved my bacon.

Ok, so the training took a few months longer than an integrated trainee, but I'm in a much more comfortable position now because of the lower
outgoings.

I'm not saying that route is the best, just look around at the options and remember its not a race.

And most of all, as said above, do not listen to the crap that comes from the FTO sales dept.
Good luck.

[airbandit]

Be careful with age....There a more chances you will loose your medical when you are 45 than 23