Loans for flight training

jtrain609

jtrain609

Antisocial Monster
Heya everyone,


So I'm reaching the point where I'm thinking about taking out a loan to finish up my flight training. At this point in my education, I'm not able to make enough money to actually keep up with this whole flying thing. I've found a great deal and some good instructors in the FBO I'm flying out of, so I'd like to at least finish off my commercial certificate with them. Right now I'm sitting at just under 200 hours and an instrument rating. I'd like to try to get the commercial, multi and CFI/II/MEI done as soon as I possibly can so I can try to get to time building as quick as possible. I've got a year and a half of college left (I graduate in December of 2005), and I'd like to have everything done at the the minimum by the time I get out of my undergraduate work.

Right now I'm not holding down any debt. I have been very fortunate in that my parents are paying for school, and have donated their old mini-van to me (that's right, I drive one pimpin' mini van with 183,000 miles on it...I'm a player). All flying has been paid for out of pocket so far, so I have no debt left from that. The way I'm guesstimating things, I can finish my ratings for about $15,000. I have to refine those numbers a little bit more, but I think that's about what it's going to take to finish it off. I think I have the time to finish off my commercial and maybe my multi this summer, and I could get the CFI/II/MEI done either during my Christmas break (we get a month off of school) or when I get out of school in April.

My hopes of course are to be instructing somewhere next summer, or doing something that would be related to flying. It's my understanding that because I am still a full time student, I could just pay off interest on the loan if I took it out with Sallie Mae. My hope is that I could also start making some cash back on flying to pay off the loan while I'm still being supported by my parents. Right now I'm only taking down about $6.00 an hour with my job at the university, and see little potential for making good money until I graduate. Believe it or not, flight instructing would be a huge step up as far as pay goes when compared to my current job.

I'd of course like to pay the money back as soon as possible. Does Sallie Mae hit you with a penalty if you pay the money back earlier than you planned on paying it out at? Is it possible to make a loan payment while you're flight instructing? At a regional? I know I'm going to be poor reguardless, but I don't want to be super duper poor because I'm paying back a loan.

I know a lot of ya'll have taken out loans for your flying, how's it working for you? I've read back in the forums, but I'm trying to get some updated information from some people if I can.

Cheers


John Herreshoff
 
John, I don't think this is neccesarily the info you wanted but it is similar. I start flying in August after I get settled in at my new job. I basically set a few requirements for myself and had to figure out how to pay for things. I could pay as I go and be still working on ratings in 4 years. Or, I can go ahead and fund the flight training with a loan. Our finances will allow us to go ahead and make payments on the loan, even while in school. I plan to finish paying on the loan about the same time I decide to switch from full time electrician and part time CFI to full time CFI. I went with Key bank. The application was very simple. I was approved quickly. They used to charge a large fee for the loan but now there isn't any fee. The interest rate is pretty reasonable as well. Looks to be at about 4.6% currently. I have heard some bad things about Key and I am a little hesitant but we will see. I don't think anyone will tell you that finishing a 4 year degree and all of your ratings with $15,000 debt is very bad at all. Payments will be pretty low on that as well. Anyway. I hope it works for you.
 
[ QUOTE ]
I have heard some bad things about Key and I am a little hesitant but we will see.

[/ QUOTE ]

Like what?
 
Hey John. $15,000 is not a bad debt at all, especially seeing that you seem to be pretty smart about money. It's what I had when I got my degree, and in three years I was able to pay it off, by a "new" used car, get my pvt, and live fairly comfortably (never missed a meal). And I was making roughly regional FO salary.

You might qualify for federally subsidized loans which would be the way to go if you could get them--check with your school's finaid office. As a 3rd and 4th year undergrad you can get 5,500 per year. That'd give you almost what you need--and there's all kinds of benefits over an alternative loan: the gov't picks up the interest tab while you're a full time student and for six months thereafter, interest is capped, you can consolidate and lock in an attractive rate, interest is tax deductable, etc.

Edited to add: when I was looking into loans neither sallie may nor key had penalties for early payment on their alternative loans.
 
That was actually my original plan if you'd believe it. But I called financial aide the other day and they shot that one down. Those will only apply to stuff charged to my student account, and I'd have to fly with the university to try to pay for flying with federal loans. Dunno if that's just beacuse we have a huge aviation program, or if they were just being d*cks because I asked an odd-ball question. I've had the thought float through my head of using the cash that's in the bank for college on flying, and taking out a loan for that amount. The parents have about $15,000 left in the bank for school, and I need that same amount for flying. At this point though, I don't think it's a viable option nor is it one I really care to look into too much as of yet, but things might reach that point.
 
That's weird--they we're probably just being d**ks. Call again and talk with someone else. One year I took out a loan to go to Europe and for extra spending $$ and my finaid office was happy to help. Why not just use the folks $$$ for flight training and then a student loan to pay tuition? The only problem I can see is if you are rich and don't quailfy for the stafford subsidized loan
tongue.gif
In which case you'll get no sympathy from me
wink.gif
 
HA! I'm not rich, but I've found in the past that I'm way too middle class to get much money out of the government
Smilecrunch.gif


I'll go and try to walk in and talk with someone in the next few days.
 
That's really weird. Back in my day...they just sent me a check for my student loan $$. They didn't care what I did with it from there.
 
I recently took out a Key Bank loan. I compared both Key Bank and Sallie Mae and not only found that the interest on the Key Bank loan was much lower but that the loan fee on the Key Bank loan was lower as well. In fact, as of a month ago, Key Bank eliminated their loan fee.
 
Are you going to get your parents to co-sign with you on a private loan? If so, then one possibility could be your parents taking out a home equity line to cover the total cost of the flight training. The interest rates are pretty low, and your bank would work with you on payment plans.

If thats not an option, then maybe you could do a parent-plus loan through your university. The way this type of loan works is your parents are signing with you on a government loan for school. You can borrow to cover the entire cost including tution, room/board, and books. The only thing about this loan is you have to start paying it back once you receive your first check. I took out a little over $20,000 last year with this type of loan to pay my tuition, and some flight training. My monthly payment on that is around $176.

I guess it all depends on whether or not you want the money in one big chunk, or spread out over the time you have left in college.
 
Heya guys,


So, I just talked with both Sallie Mae and Key Bank, and neither of them have any clue who the FBO I fly with is. The guy at Key Bank kept telling me to talk with the financial aid department at my flight school because no one pays for their flight training out of pocket, except for maybe the super rich. He didn't seem to understand that the FBO I fly with has like 5 employee's and 8 planes. Do these guys not loan out money to people for Part 61 schools?
 
ACK! I've heard about pilot finance, and I might as well put my flight training on a credit card
smile.gif


152, dunno if they could take out a home equity loan. The house is actually in the process of being sold right now and they're in the process of trying to move. Might have to go with a PLUS loan or something similar, we'll see how this goes. I just left a message down at Ari-Ben, gonna see what they could quote me on doing 50 hours of flight time to finish the commercial, obviously get the multi done, and nail down my CFI/II/MEI.
 
Ahh I see the problem. Key lends money to some FBOs but they have to be approved by Key first. I am having to do a very round about way of working with key to get money for flying. I am now a UVSC student so that I can use their resources such as key. I am also doing it so I can use GI BIll benefits. In the end I will have paid around 10,000 tuition to UVSC and gotten about 22,000 back from VA. Obviously my siuation won't work for you and I wouldn't do it if I weren't coming out ahead on VA beneifits. Look into Key's supplemental loans for your regular college. Key loans the cost of attendance plus cost of living. So that would probably be enough for you if you did it that way.
 
Well I am in sort of a similar situation you are in. I am finishing up my PPL and I HOPE to be CFIing by next summer. Thats my goal lets see if it happens.

I plan on taking out a loan for about $20,000 to finish up my ratings. I have a little amount in the bank that should cover, hopefully, up to my Commercial, and then after that I will probably need to take out a loan.

Anyway, a senior CFI at my school that is close to getting hired he said the trick is to HAVE PEOPLE TO START PAYING YOU TO TRAIN THEM ASAP! He said that whatever it takes to start CFIing, in his opinion is key.

Not sure if that will help out, but I thought a lot of what he says and it makes sense. So I guess what I am saying here is to do whatever needs to be done to start getting paid to fly.

By the way if you are looking for a somewhat decent paying job that is pretty flexiable, let me know. I work part time at Marriott and its a nice company to work for and they generally are pretty flexiable with the schedule if you are open with them up front and the pay isn't to bad. I can look at a list of job openings in your area for the company.
 
Yeah, unfortunately both Key Bank and Sallie Mae want approved schools for thier loans. That's why I stuck with Air Orlando instead of going with the less expensive planes on the other side of the airport. There is no pre-payment penalty with Sallie Mae, and so far, I've had good experiences with them. Never dealt with Key Bank, but they're first on my list if I need a loan for MAPD. I think Ari-Ben has both options, so I'd go with whoever gives you the lowest payments/interest rate. As far as interest only payments, you'd be surprised how little that reduces your monthly payments and how much it lengthens your repayment period.
 
I'm actually using my Senior year Stafford Loan to get my private. At my school, whatever is left after tuition goes into your personal bank account.

I think most schools do that, so you might want to check into it further.
 
You must log in or register to reply here.
Back
Top