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Financing .. Revisited ..


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Hi all,

 

I have a question regarding the financing of flight school. I'm currently debating my options, which are:

 

1) oilfield work, get the entire amount and then some, go do flight school

+ no debt

+ no flight school interruptions based on lack of funding

+ ease of mind

- long timeframe (no flight school until ~ 2009)

- getting older (30 now)

- first job hunt pushed down the line

 

2) partial oilfield work, get loan for ~ 25K, pay rest through oilfield work

 

3) get loan, do flight school and find job that helps pay it off

+ immediat start on flight school, followed by job hunt (roadtrip)

+ get to pay off loan with work I want to be doing

- lower pay compared to oilfield

- loan pressure

 

 

So, really, Nr. 1 would be awesome .. why I'm actually asking is because I know very little about loans / LOC's and such ..

 

1. LOAN or LOC?

 

1. Where to get a loan / LOC?

 

I know I can get one through my bank, but I was wondering wether there are financial institutions dedicated or specialized to the flight industry.

 

How much they cost (interest and all)?

 

Say I get 50K, how much would be paying in the end? (ballpark, 10%? 4%?)

 

Whether you recommended it?

How much did you struggle to pay it back?

Would you take the same route again?

 

My mind is made up as to whether I want to be a CPL or not. I guess I am struggling with the risk of a loan for doing what I want to do immediately or sticking to the 2 year plan with its safety but time delay.

 

Last but not least, if anybody working in the oilfield reads this and is looking for a qualified and hard-working individual, please pm me.

 

If you don't want to share your story in the forum, please pm me with your tips and tricks.

thanks a lot

+M

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Personally I would say go make the money and then pay cash for your training. It may be very difficult to make payments on a $50000 loan on what you will be making as a new pilot/groundcrew/indentured servant. You would probably find yourself back in the oilfield to service your debt. The difficult part may be keeping focused on your goal and not going out and partying the money away.

 

I sold my house to pay for my training. While I regret my decision sometimes, not having an oppresive debt load combined with a small paycheck is some comfort and gives me some flexibility when it comes to work.

 

my 2 cents

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Hey Matt,

 

You won't find much difference between a loan an LOC however fixed term loans usually have lower interest rates. Unsecured lines of credit for 50k will run you about prime + 1.5% if you have good credit (ie Beacon score above 750). Prime is currently 6%. Secured against something like a home you could expect below prime. The lower the amount of the loc, the higher the interest rate. I know it's kind of weird but banks figure there is less likelihood of you walking away from a large debt than a small one, hence the lower interest rate. I'm not sure if flight school qualifies for student LOCs anymore. Most banks charge less on them since they figure a guy going to school will earn more income coming out of the situation and will be able to pay it off. We all know this is not true for flight school but I'm not sure if they've caught on to this. Best to go to a bank and they'll be able to fill you on current rates and what servicing the debt will cost you.

 

Servicing any debt while you're making 10 bucks an hour will be tough, especially when you factor in the cost of living in some of the places a new pilot might find themselves working in. To put it in perspective, $10/hour at the standard 40 hour work week is just under 21k per annum. You think you can service a 50k or even 25k loan at that wage after taxes and living expenses? I know I couldn't but my financial situation and goals might be different from yours.

 

That said, I'd opt for getting all the money ahead of time. Personally, I am going to pay for everything up front and then some. Money for school and then enough to cover my non-discretionary expenses for a year. Sure it will delay school a bit but having the security and the ability to make career or personal decisions without having to consider debt load will be more beneficial in the long run I figure.

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If you are going to work the patch, an idea might be to seek an over-seas /out of country job. A friend of mine seeks these out for the pay ( anywhere from 350$ + a day ). I dont know that much about it, however it may be worth looking into. Oh ya on a side note when they ship him out he usually has a layover in GB or Heathrow, party time he says being Amsterdam is only a short ferry ride away I'm told. Good way to see the world too if you like third world countries. :D Might be worth looking into to boost the wage up and accelerate your plan. Personally it sounds good to save it up and pay it out no loans. You might also want to see if any grants are available never know whats out there for free grant money. Let us know what you find out and best of luck.

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