Are banks loaning money for flight training these days?

Customx

Well-Known Member
With the $700 billion deal dead for now, are banks reluctant to loan money for flight training? I'm planning (been saying that for 2 years now) to move back to the US in March, but am really worried about the economic situation. I've also taken a huge hit on the exchange rate between the US dollar and Korean won (down 21% this year). The Korean currency is at a 5 year low, and since I have all my money saved up here, it doesn't really make sense to convert it to dollars and lose as much as I have. Therefore, I'm weighing whether or not to take out a a loan in the US and keep my money in Korea until the exchange rate becomes more favorable.
 

Sprint100

Well-Known Member
I'm figuring if they aren't going to be given out the secured loans (ie., auto, house, etc.) I doubt they'll give out unsecured loans for flight training. I could be wrong, but I would give out a secured loan first.
 

Matt13C

Well-Known Member
I just talked to BOA today regarding the AOPA flight training fund deal and it was a joke. I have a bit of debt from my PPL and a car loan and the best they can do is 17.99% for 8 years.

They said if I got rid of the CC debt I could go as low as 10.99%

I am still considering it, if I can get a rate below 8%. I know many people on here will say pay as you go, pay as you go. However, with todays rates it costs 1,000 for 6 hours with an instructor. That is 4 weeks of training if you fly one time for 1.5 hours and have zero ground time. I dont know about most people on here but I dont have 1200 or so dollars I can just pay to the flight school every month. On top of that, since I am working on the IR rating I need to build time. The 35 hours I need in XC time will run 3500 minimum, more like 4000 though.

At that rate, it will take 3 years to finish up my Comm and who knows where prices will be for an instructor and renting at that point. I would rather take a loan out, pay as much as I can every month to paying it down while flying as much as I can at night. Keep working my day job, do any flying I can for hire on weekends and nights, if that is even possible and pay down my debt at todays rates, not tomorrows.

When the industry rights itself, I should have most of the debt if not all of it paid off. I can then get my CFI and do that until I have the hours.
 

jspeed87

Well-Known Member
That's a good question that I can benefit from too. Lets hope that banks do continue to give out loans.
 

intern_mike

E-175 f/o
I was the last domestic student at Flight Safety to be approved for a loan. Most all of our new students are here on foreign contracts. What will be interesting to see is whether anyone will be able to afford flight training in the future. It's literally astronomically expensive to get all the required ratings.
 

ilove747s

New Member
Right now it is VERY hard to get a unsecured loan. It will be a little easier to get a loan with some kinda of collateral: car, house, CD secured loan, etc........

Banks are very tight with unsecured debt right now on the other hand credit cards are still being given out though, perhaps not at the same available credit lines as once seen, but it could be a good option for you if you don't have have collateral to put up for a loan. The only thing with the credit card is you must know how to use it. Know how much you'll pay each month with X amount charged on the card, terms and conditions, interest rates, etc...

Be careful!
 

PanJet

Well-Known Member
Absolutely no offense to those who have loans as aviation is an expensive venture, but my personal opinion is that it's a sad day when the country comes to a standstill because of a lack of loans. It just shows how artificially inflated our economy actually is.
 

Customx

Well-Known Member
And they're horrible.
12% IR with good credit and a good co-signer with assets.
That was a month ago. It's most definitely worse now.

Anyone care to drag up the loan rant?
I could actually do all training without a loan, but I'd like to maybe use 10 or 15k. If I can't get a decent rate, I'll just stay in Korea a few more months and then pay for everything in cash (assuming oil doesn't go back up to $150-200)
 

TXaviator

Well-Known Member
And they're horrible.
12% IR with good credit and a good co-signer with assets.
That was a month ago. It's most definitely worse now.

Anyone care to drag up the loan rant?

i was approved by salliemae in the spring semester, had no change in credit standing, and was denied for the fall semester.

i thank my lucky stars that i completed my CPL before the credit bust.

im hoping the market tanks in some weird/wild way that either i dont have to pay back my loans or that the dollar is so worthless that i can wipe by butt with zillion dollar bills

:nana2:
 

TXaviator

Well-Known Member
Absolutely no offense to those who have loans as aviation is an expensive venture, but my personal opinion is that it's a sad day when the country comes to a standstill because of a lack of loans. It just shows how artificially inflated our economy actually is.

no offense taken. i believe there is something VERY fundamentally wrong when education required astronomical amounts of debt which equates to indentured servitude....

that, however, broadens the discussion considerably.
 

TXaviator

Well-Known Member
and PS -

can someone explain to me whats the deal with these financial institutions and their sillie -IE+(3 letter word) names?

sallie mae
freddie mac
fannie mae

is there some sort of reasoning for these circus clown names? ...maybe i just answered my own question...

found it!

All three started as government sponsored enterprises but are independent corporations. Fannie Mac was established in 1938. It's name comes from the abbreviation of the original name Federal National Mortgage Association (FNMA). People started calling it Fannie Mae and the name has stuck. In fact, it's now the official name of the corporation. Freddie Mac comes from Federal Home Loan Mortgage Corporation (FHLMC). A bit of a stretch but that's what it's from. Freddie Mac was established in 1970. Sallie Mae is similar...Student Loan Marketing Association (SLMA). It was established in '72 with federal backing but has since severed ties with the government and is a stand-alone corporation since '04.
/\
paraphrased from http://www.stationstops.com/2008/09/08/how-fannie-mae-and-freddie-mac-got-their-names/
 

Toonces

Well-Known Member
no offense taken. i believe there is something VERY fundamentally wrong when education required astronomical amounts of debt which equates to indentured servitude....

that, however, broadens the discussion considerably.
I totally agree. However I think the lack of loan availability would be a good thing for the industry. I think flight training costs would come down (although not dramatically) and the pay at the airlines would be able to creep up. With a never ending supply of pilots coming out of the factories, wages are going nowhere but down.
 

Boris Badenov

It's a work in progress, but, ah, symbols endure
I'm afraid we've hit the point where it's either runaway inflation or a deflationary depression. Even good ole gloom and doom me didn't think it would possibly happen this soon. I'd bet on inflation...sort of an Argentina 2000 scenario. Except of course in the world's largest market.

If that proves to be the case, this would actually be a very good time to take on as much debt as you possibly can.
 

Wm226

New Member
With the rejection of the bailout bill, it is likely going to be a lot more difficult to aquire loans in the near future -- due to a liquidity shortage. I don't think the majority of American people understood this when they decided to pressure their congressmen.

:-(
 

deek

New Member
I got my loans back in Feb. and got a decent rate since I had A+ credit even thou I'm already in debt 6 figures to sallie mae after college and flight loans. Maybe this will really make a pilot shortage in the near future if you can't train replacements cause they can't afford it, or airlines will have to pony up to train their own people, which would be indentured servants so not like QOL would be any better. There is that nugget in the back of my head that's praying for a total market collapse, just reset back to zero and start over, but I imagine it would be pretty bad for a long time before it got any better, a la mad max.
 

falconvalley

Absentee Dad of the OOTSK, Runner, Cat Frustrator
The credit crunch is an unfortunate reality of these days. I'm not sad that credit is involved. Credit plays a big role in today's economy and I'm glad it exists. I'm sad that soooo many people handle credit very poor. In retrospect, I'm not surprised having noticed a trend of bad credit practices over the years.
 

Matt13C

Well-Known Member
I'm afraid we've hit the point where it's either runaway inflation or a deflationary depression. Even good ole gloom and doom me didn't think it would possibly happen this soon. I'd bet on inflation...sort of an Argentina 2000 scenario. Except of course in the world's largest market.

If that proves to be the case, this would actually be a very good time to take on as much debt as you possibly can.
I always wondered how this works in rregards to salaries. Prices of goods are easy to raise, the owner changes the price. However, when it comes to salaries, what happen? Most of us have the annual meeting with the boss where they say "Congrats here is your 2% raise! You actually lost 3% when you account for inflation!!!!"

So, I am thinking most of us would just sit around not being able to afford anything until it came time for our review. I mean, the cost of food, gas, clothing and pretty much everything else has gone up a good deal the last few years. My salary increases at my last job did not follow inflation and from what I hear my current employer has a standard salary increase and if inflation stays at 5% it will not match it.

I will obviously try and negotiate the increase and work my ass off the deserve a larger increase, but they have the power. If inflation is running away and people are hurting for work they can easily fire me and bring someone in for less money. :banghead:
 

kersplatt

New Member
I could be wrong on this but I would assume that it may be easier to get a loan for flying if you go to a flight school that is affiliated with a community college or a university. Then the loan is by US Dept of Ed. There are several flight schools that are through a college throughout the US.
 
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