Banks and loans - credit crisis?
 

Hi to all,

Just a friendly note to say that HSBC and Barclays have now completely stopped doing Professional Studies loans for an ATPL. I'm over the moon about this after spending hours on a business plan which the bank manager at HSBC commented was one of the best he had seen for a very long time (with the help of my fathers input) and even during the presentation he was sure that the funding was still available. Unfortunately Barclays have also gone south on this issue. :ugh:

Whilst this thread may seem pointless and negative I actually wanted to write this to say to anyone in my position at the moment....DO NOT GIVE UP! If you are half as eager to get into this proffession as I am, and for the right reasons, then DO NOT GIVE UP!

Anyone out there in this crap situation that doesn't know where to try next reply to this and maybe between us we can come up with some idea's!!!

Cheers

Chris

Try different branches. Each branch has it's own rules etc. and can be different from the same bank just up the road.

I know it's a lot harder to get PSLs for flying training these days, but it's not impossible!

If you walk in and ask for 70k then you are in for a hard time, but say you need 15k for a CPL and FI rating then you are in much better territory. Excellent job prospects (shortage of instructors) less financial risk for them etc.

You have to give and take with the banks quite often and give them an incentive. Usually this is of the form of 'I can afford to pay you back if I fail at flying because...'

Banks are hard cases to crack, but it can be done.

Bri

Hi,

Well I did go to the Poole head office and speak to a very high up business specialist (through contacts at my current work). Still a big fat no.

However I did do a comprehensive section in my business plan which covered "How would I pay you back if I couldn't get a flying job". I nailed that part with, I'm currently an Accountant and can earn 'X', even produced a copy of the latest Hays Finance and Accounting Salary guide proving as much.

After speaking with parents I'm now looking at borrowing £50k SECURED! So no way I can mess it up! Not that I intended to anyway, but you catch my drift.

One big headache!!!

Welcome to the Global Credit Crunch.

WWW

Firstly, this doesn't actually surprise me at all. If you take a totally over-subcribed industry, at saturation point with low houred frozen ATPL holders, and then add the number of pilots that are being added each year to those figures, then the risk factor for the banks in terms of obtaining the money back would be much greater. For the bank, us student pilots are seen as an investment - they put some money in, they get a lot back in a few years time. However, with the number of f(ATPL) holders dramatically exceeding the number of jobs available, then the banks might well be starting to come round to the view that there is just too much risk in these loans.

In short, it's a problem that we've heard mentioned time and time again - too many applicants, not enough places.

In a final note, I assume this is likely to have a negligable impact on us loan holders already?

OAT and their local HSBC still do it and I believe Cabair and their local HSBC also still do PSL.

BBVA UK will loan for FTE and OAT so you may want to try them.

the saga continues . . .. .
 

Barclays have now also refused the application unless it can be paid back during training, which is basically impossible.

They are happy with my crudentials as far as actually being able to pay back the loan (with the help of my fathers business) should I not be able to get a flying job but with the banks tightening up after months of bad publicity it looks like bleak time ahead for any new wanabee's.

For you guys who are currently training...all I can say is keep your heads up, jobs are bound to appear again, Tourism is officially the fastest growing industry in the world and has been for some years. Being an Accountant I even went through the Consolodated Profit and Loss figures with the bank and showed that the vast majority of Airlines (Passenger and Cargo) are reporting consistent growth in profits year on year, whilst this continues they will only expand and order new aircraft.:ugh::ugh::ugh::confused:

I thought they stopped doing the loans ages ago (ex-special agreements with the likes of Oxford etc).

To understand why the banks have done this just do a search for some of the threads on "bankruptcy" on this forum and thank the folks who were actively encouraging people to shirk their responsibilities and go down the route of declaring yourself bankrupt post training to avoid paying back training costs.... this is a simple derivative of that attitude... if enough wannabe pilots don't pay back what they owe then the banks are quite right to pull the plug. Don't blame the banks blame those that have gone before you and not honored a contract they entered with the banks when they started their training :{

But the logic and practicalities of going bankrupt post training still hold good. You may no longer be able to finance the training via a career development loan but you can still get all manner of unsecured loans and credit for general use.

Career Development Loans were always slightly suspect for funding basic training. As their name implies they should really only apply to, say, a Flying Instructor wanting to fund an IR or Type Rating which would allow him to 'develop' his already started career.

WWW

The bank that I spoke to (where I have been a customer for 7 years) said that airline training was not likely to attract funding because the market is too volatile. Lots of jobs one minute and none the next.

Flight instructing however was something they were willing to consider provided I paid for the PPL and ATPL groundschool. They would effectively pay for the CPL and FI rating with a Professional Development Loan. And that was only 6 weeks ago!

B

HSBC won't lend you the money, not a surprise, you can thank all the "clever" people before hand whom thought that declaring backruptcy was the answer.
There is no reason in the world why a bank should lend you the money other than if you have the appropriate credit history and income to support the loan. So if your current income and credit history is good enough you can get a standard unsecured loan for 25000 with a three month deferrment from any mainstream bank. If it isn't then you need to work and save for longer.

Well yes thanks very much to the "clever" folk out there who have now completely knackered anyone else's chances! The bank are right to be cautious with all the bad press that they have had but then again it's not like they didn't deserve it.

I have proved to them that I can pay back the loan, flying or not, I have provided security in the form of my father, I have spent hours and hours doing a business plan only to be told that "oh no sorry we've recently stopped doing them for ATPL's" Don't get me wrong, I'm not on here to have a good whinge, but to come so close and get shot down is a bit pants.

However I am now looking at what other banks can do and in the mean time saving everything I can from my day job to self fnd as much as possible. It's all fun but then again no pain no gain. :)

"But the logic and practicalities of going bankrupt post training still hold good"
:rolleyes:
Seems to be a magnet somewhere near your moral compass?? and as such the likes of chris-squire suffer as a result of this sort of attitude as the opportunities that were available to others to finance their training are now not availiable to him. Shirking your responsbilities be they debt or otherwise strikes me as a cowardly and selfish way out of agreements you have signed up to in all but the most extreme circumstances.
Anyway this has been covered before many times and each individual has his/her own level of what they consider to morally acceptable behaviour. Just a shame others have to suffer the consequences through no fault of their own

The banks make enough money out of "us" as it is......£7bn profits for Barclays and the like. I think it's disgusting!!!

As for people declaring themselves bankrupt...good for them, i think it's great that they have finally managed to break out of that downward spiral which was instigated by the banks in the first place.

I do not think being bankrupt is the answer at all, but i do think that the banks have a lot to answer for when it comes to low paid/people with limited means. They are the banks bread and butter...and they know it.

The old adage cream always rises to the top still rings true. Those that find a way and battle through all of the challenges will make it through and good on em. Along the way they will probably learn more from the knocks and have greater experiences to share at interview time as well. It might just tip the scale showing the interviewers how you are made of tough metal.

Grass Strip, Pot Kettle - Great comments!!! It is the likes of me and others like me who genuinely struggle to get our foot on the ladder that get seriously p*****d off with those who think that bailing out of financial responsibility is the right move and I forsee times when employers will be taking a dim view of those who do so, after all, the airlines want someone that they can rely on. Hardly a great demonstration of that now is it!

These challenges build character and at the tender age of 21 I do have time on my side to a degree but I'm soooooo eager to ger flying, whether it be in the right hand seat of a 737 or a TP, I don't care, just want to fly for a living! The money genuinely doesn't motivate me, as long as I can put a decent roof over my head, pay the bill's and look after my family then that's fine by me. I would quite happily take a reduced salary for the rest of my career if it meant that I got a flying job.

Sounds desperate but at least I want this for the right reasons I guess.:)

Ah yes its the banks fault.... certainly not the responsibility of the individual.

I hate to break it to you but the big UK banks will make c£30bn this year in net profit not £7bn... c50% of which comes from overseas. How much money do you think the banks make from "low paid people with limited means"?? Believe me it is bu**er all, if it wasn't for the government's social inclusion rules they would have nothing to do with that customer base.

The profits also means the banks are paying over £10bn in taxes a large slug of which helps support the UK public sector. XL319 do you have any idea how Barclays makes it profits?? Or the benefits that you enjoy from the UK having a healthy financial services industry? What is it with everyone wanting to knock successful businesses in the UK??

If you don't like them don't use them... why should banks provide a service to you for free??... you don't work for free do you? (Unless you are a new pilot at Ryanair of course... :O)

Anyway we digress..... chris-squire good luck with finding another route to fund your training, you have my sympathy but you at least seem to have your head screwed on so I'm sure you will get there in the end :ok:

Well coming from a financial background I know just how much the banks make. As I mentioned earlier, when I was reading through the consolodated trading P&L for the major UK carriers it now makes me laugh when the likes of BA and Virgin come out with their sob stories in Accounts publications about how much money they aren't making per seat! I am convinced that the jobs market will pick up again, hopefully in about 2 years time whien I will be looking.

As for those currently advocating going bankrupt...:D well done, you're all very clever and have done this industry a world of good. Good luck when applying for a mortgage!
:mad:

In the mean time, one way or another I will be flying for a living over the next 18 months. Look out airlines..here I come! :)

You could always save up ... :suspect:

I am already saving up but even with being in a reasonably well paid job its a tad hard to save up £50k +. Maybe a few thousand but by the time I had enough I would have a mortgage around my neck and probably kids too. Don't take that as meaning that I'm not willing to go down that road as I may have to if all else fails but I figure the younger I am the more chance I have, and also, trying to save that sort of money when I have a mortgage will be near impossible. I know that sounds very defeatist but this industry requires me to be realistic.

Cheers anyway though.

You hit the nail on the head! The realism is that you will probably have to go modular, and perhaps get CPL/FI in the first instance rather than CPL/IR because a) it's cheaper and you can probably get the banks to part with a more modest sum of money and a realistic objective, and b) you can be paid to fly.

Banks have seen the '70k for ATPL' too many times to be fooled now. Even if YOU intend to pay it back there are plenty who didn't and that is why the banks are reluctant.

You also have to have the atitude that to reach ATPL you might have to take an indirect route: that part of the plan seems to be lost on the 'youth' of today!:= There seems to be an atitude of I want an ATPL and I want it now!

B

Youth of today!!! You're 27 not 77! I don't have that attitude at all and I am looking at a modular route but the costs involved intraining are massive, as you know and the days of being able to fund part of you training, pay it off and move onto the next bit are long gone in my view. By the time you have paid it off your ratings are beginning to lapse and in the mean time you can barely afford to live. And when i say live I mean being able to eat not having a nice car or going on holiday etc!

So yes I do want an ATPL and I do want it ASAP but don't mistake that for not being prepared for hard work and sacrafice because believe me nothing could be further from the truth, in my case anyway.

I do however agree with your comment on the banks. They have wised up but unfortunately the very clever individuals who thought it wise to dump their debt have ruined it for newby's like me. But as I also said earlier, this industry requires 3 key things in my book 1) Realism 2) Commitment 3) Bloody Hard Work! I am prepared for all 3.:)

Good. I wasn't necessarily referring to you specifically-but there is quite an attitude in the wannabes forums that the direct route is the only way, and airlines are the be all and end all.

You will be able to get banks to part with money if you don't ask for too much and are realistic about your objective. The chances of being taken on as an instructor are higher than an airline, and it costs a bit less.

I do agree that the do it, pay for it and do the next bit approach is not really an option due to ratings lapsing etc. But one just has to think a little laterally about these things.

Don't forget you can cut your hour building bill massively by flying your friends/work colleagues at weekends-so long as you don't advertise the flight, carry 4 or less people, and pay an equal share. Firends tell friends and often you can find quite a few people who want to fly around and see their house etc.

B

Yes I have noticed that there does seem to be quite a few young whingers on here that want the gold bars on their shoulders more than the job itself, just wanted to make it abundantly clear that I'm not one of those. As for everyone being obsessed with airlines, I do agree, far too many people talk down the TP jobs with the likes of Flybe or even cargo flying. Morons! Jobs like that seem like a great way to build hours and get commercial experience. Infact I will be aiming for a job with Flybe out of SOU when I eventually fininsh my training.

To be honest I didn't realise that you could fly your friends around and cut your hours building costs down that way. I thought you could only do that with a CPL but anything like that where I can cut my costs down is a bonus!

One question...does time in the Sim count towards TFT? Im guessing not but wasn't sure???

Banks are :ugh:

When I was at Law School 10 years ago and asked for a £2,000 loan to pay off my credit card they tried to get me to borrow £25,000 simply because I was doing law. And I would estimate that less than half those I was with at Law School went on to get employment.

I went on to practise for 5 years as a solicitor and despite having another career to fall back on, the bank now refuse to consider me for a loan to pay for any of my flying training.

But because of having been a solicitor and despite knowing that I am unemployed during my flying training, they've just granted me a £10,000 loan on the simple basis that it is pre-approved.

Go figure.

[I know I will pay back all the money without missing a payment for various reasons, but you have to question the consistency in their corporate decision-making]

The rules on private flying are simple:

1. You can carry upto 3 passengers.
2. They can pay provided you pay at least an equal share of the flight cost for the number of people on board.
3. The flight cannot be advertised formally, but word of mouth amongst friends will be fine.

You can only count sim time if it was a designated flight test: I have two hours in an A330 sim but it was fun not a test so it doesn't count.

B

What do you mean by pre-approved?

Pre-Approved, simply means that due to the current credit rating of the individual the bank will lend a certain amount. Pre-approved loans are normally offered by banks as a "promotional offer", you don't apply for them, banks will often mailshot all customers with a certain credit rating stating that you may take out a loan of X amount, essentially the bank hopes the offer will tempt some individuals into taking out a loan. Obvioulsy it is targetted at those that have a credit rating that suggests they will easily meet the repayments.
I am not sure exactly how many people have defaulted on loans as a result of flight training, but it seems there is reasonable evidence from posts on this forum that it has happened. I would also like to point out these were also the same sort of people that challenged training bonds in the european courts, claiming that as they limited someones ability to move jobs it was effectively illegal, consequence is more airlines have switched to self sponsored type rating arrangements.
Chris Squire,
If you have a decent job then keep working while you hour build, do distance learning for the ATPL thoery then you will only need to give up work for the CPL and IR. That way you will only need to borrow about 25000, as said if you are currenly working then you won't have too much problem securing a loan of that size. There is no point gaining too much debt; after training to get a job you will either need to instruct on mimimal earnings, or self fund a type rating, with 50 k of debt neither of these will be an option.
Aiming for a job with Flybe, you will be lucky, although the last advertising campaign stated "live local fly local" adverts.
I know someone with first time passes in everything, an aero degree, currently a full time instructor and an address 20 miles from the main flybe base and still gets ignored by them.

Perhaps you've not noticed that the credit markets have seized up, and HSBC is sitting on a large amount of rubbish loans to everyone and everything at the moment...!

Not even the PE houses can get multi-billion dollar loans for buyouts this month.

Just to add - WWW - this seize up has been caused by fraudulent home loans in the US, which people have defaulted on rather than paying. Little different from your "planned" bankruptcy idea - which pooled across many people actually does have a huge impact.

Their reluctance to lend to any group (pilots) that has some immoral members who are planning to default on their loans (ref your previous comments in that long thread on the matter) is hardly surprising...

What all this says really is that to be a pilot you have to have a rich daddy really. Airlines won't pay, banks won't pay (on the whole) so that leaves your parents (who in my case won't pay) or selling your granny (which I don't have).

As I have said, to get loans from banks you have to set the sights lower and ask for less cash-the less you ask for the less risk they take and the more likely you are to persuade them.

In the rail industry it is the law that all driver training (about £50k) has to be paid for by the train companies at the approved schools. All the aptitude tests are centrally administered and identical for all candidates regardless of company. And don't think for one moment that getting to be a train driver is easy-just try their Group Bourdon aptitude test...it's mind boggling!

But perhaps the rail industry model is a good one as it ensures a consistent standard of training in a safety critical industry and that the new driver doesn't have sleepless nights because of £50k debt hanging over his head for the next few years.

Sorry for the slight drift.

Well the rich daddy thing isn't an option for me, although my parents do have significant security to offer which does help my case. And some good news...I was up until 3am this morning (then in the gym at 6!!!:zzz:) and it looks like my best chance is to go to a flight school such as cabair who still have close ties with the bank. Have to wait and see what happens but it does mean bleak times ahead for any flight schools not linked to a bank and also less choice for the customer unless they have a rich daddy to send them wherever they fancy. This may also mean that an elitist attitude may wangle its way into the industry. Not good!:ugh:

Absolute bull coming out at the end of this thread. I am paying for everything myself, saving and doing, saving and doing. It's what I did to go to Uni and then afterwards to go and backpack around the world.

It is possible, cos I'm managing perfeclty fine. For sure I make sacrifices, and have to take on overtime at work etc, but at the end of it I'll owe no money to anyone and I will not have screwed up my chances of getting a mortgage.

I'm sure it would be different if I was raising a child, so I can only comment to those who don't have a family - it is possible without borrowing £50k just work harder and smarter.

My last jab is to those who have or are planning to default on large loans, firstly this comment is pretty much from the fence as I am not going down the route so the fact that banks are not doing them anymore has no bearing on me. You are absolute idiots! Not only do I have a moral objection to what is basically stealing but you are going to run into difficulty in later life when you might really need that credit facility from a bank.

Camel Toe
"Over Macho Grande?"

http://www.accountancyage.com/accoun...ents-insolvent

10% of Uni graduates are going Bankrupt and walking away from their debts. This will be 20% in a few years time.

The US mortgage situation is hardly fraudulent. With interest rates at 1% the banks were falling over themselves to give huge mortgages on teaser rates to rednecks and vagrants who would never be able to sustain them. The banks didnt care. The banks CAUSED the current crises. My heart does not bleed for them.

This situation in the UK is little different. Instead of Sub Prime we have Lie To Buy (Self Certification) and we also have Buy To Let whereby people of modest means and intelligence are encouraged to make highly geared speculation on property. Now that the property prices are coming down and rents don't even come close to cover the mortgages they will all have to sell all at the same time and all for a heavy loss. Again, the Banks caused this by lending recklessly.

But this is by the by.

You can still get two credit cards with £8k limits, still get a £2k overdraft and still get a pre-approved any-puropse loan for £20k all in an afternoon if you have a clean history and an average wage job.

£38k is enough to cover the modular PPL CPL Multi and IR.

If you are young and have no ties then there is very little stopping you going bankrupt. It won't stop you getting a job in a years time nor will it prevent you getting a mortgage in a couple of years time.

Rubbish system. But its the one this Government bestowed upon us and people are totally rational and logical in their exploitation of it.

Cheers

WWW

camel toe - I congratulate anyone who finds a way of self funding their training so forgive me for being a tad rude here but ask yourself this...How old are you now, how old will you be when you complete your training...in reality how can you pay rent/mortgage whilst saving etc. and finally I work in a fairly well paid job which is salaried and not hourly i.e no special overtime rate...so how are you finding enough money to save to complete your training? Believe me I have looked at this option but when I sat down and worked it all out it would take me around 8-10 years to complete the training! So bearing in mind that I am now 21 I wouldn't be able to get my first job until I was 31 at the earliest. Yes I would be reasonably debt free but between now and 10 years time I could have completed my training, got a job and paid back a very large part of my initial borrowing.
To me it just doens't make sense to do it this way anymore. And besides whilst my mrs is prepared to support me in anything I do, it isn't really fair to ask her to live at home for the next 10 years until I can get a job.

Now please don't mistake this for me having the "I want an ATPL and I want it now" attitude because nothing could be further from the truth, I am prepared to give up everything, work my arse off for a few years and then fight to get a job like everyone else...but there are limits in terms of time in my book and 10 years is just too long.
All comes back to reality.
Cheers
War and Peace Chapter 8!

My "business plan" was and still is a 2-3 year one. I moved back home to save on rent, I still pay board and I get no direct financial help from my parents.

I too work in a salaried job and receive time and half for overtime, nothing special there. When I needed an injection of extra cash a few months back I worked in a bar a couple of evenings a week getting paid bar wages too. I'm fortunate in that I enjoy my day job.

I have 3 friends who have done almost exactly the same thing, one is now on the Dash 8, one on the 146 and the other is a FI. All worked, completed a module, worked, completed a module. One of these started at the plan at 18 and she got her first airline position 3 years later, another took less than 3 years starting on the road at 25, and the last was instructing in about the same time and was about 28 when starting out with a mortgage (albeit shared with a partner).

I would not want to pass comment on your individual circumstances or even try to offer advice like "do this, do that", I am just trying to make people aware that it can be done, and by an averaged salary individual from an 18 year old on lowish salary, to a late 20's with a mortgage. However I appreciate everyones circumstances are different and what can work for one, may and by the sounds of it cannot work for another.

Moving on from here, a previous poster has made a good point re credit cards, just jiggle them around, use the free balance transfers etc to boost your capital. Interestingly enough I am led to believe that as long as you don't default on any of these your credit score will be higher when it comes to getting a mortgage.

Hi everyone

Can I just ask WWW why he thinks that giving people advice on getting unsecured debt with the full intention of declaring themselves bankrupt is constructive? It is FRAUDULENT, thus ILLEGAL, and can land you in some very, very serious trouble. Do you have the personal experience of doing this WWW or are you going off what other people seem to think is okay? If you have beliefs otherwise, then go and speak to a lawyer about the wisdom of carrying out such an action.

It's a stupid idea, which is why people don't do it.

cf

It is a stupid idea. But I have been told in the past by people inside the industry that if you really want to be a pilot can you really ignore it as an option?

For some people it's the only way they can possibly 'fund' their training! Some people of the right age will have no security for loans and no way of getting parental guarantees etc. So unless they want to forget about their chosen career, the bakruptcy route becomes a real option!

Whilst I agree entirely with your sentiments cfwake-I think the lengths to which some people will go mean that they will go down this route. And the reason they have to go this way is because airlines, who lets face it make huge profits, are too penny pinching and idle to pay for their pilots training.

I hope that one day their shortsighted policies will come home to roost! In the meantime, lets forget the bankruptcy 'option': it's not wise!

B

The whole idea of declaring bankruptcy is really not a great idea. Like it or not it WILL affect your credit for many many years!

All it serves to do it make banks even more wary of lending such vast amounts of money to newby pilots. If too many more people take this route then the likes of HSBC will shut their doors to all borrowing linked to an ATPL course and that will be that. Rich daddy or don't bother will then set in and for us wanabee's that just want to fly and step up to our responsibilities, financial or otherwise, we will find progressing much beyond PPL a near impossible task!


Anyway, on a more positive note...with the airlines making such massive profits hopefully it won't be too long before they start offering more sponsorships again. Although I don't think full sponsorships will ever be seen again.

CS