helifool Posted May 18, 2007 Report Share Posted May 18, 2007 I have been waiting patiently to go to flight school for ten years now. Ive decided to attend Bristow Academy in August. Now my dilemma is figuring out financing. I just got approved for $50,000 over 15 years at 8.25% from loantolearn.com. Has anyone used this company for their training loans? Should I also try for Sallie Mae, because I really will need more like $60,00 to cover full training and housing. Also my dad is willing to refinance the house for a loan. It's such a tough decision to make! Quote Link to comment Share on other sites More sharing options...
Sparker Posted May 18, 2007 Report Share Posted May 18, 2007 (edited) Are you sure you have really thought this through? When you are borrowing two or three times as much as the average college graduate with a beginning wage (CFI) usually considerably less than the average college graduate, how do you plan on making the payments? If you are counting on your CFI wages to pay for the loan, food and a house or apartment, you will be stretched very very very tight. Loan Balance: $50,000.00Loan Interest Rate: 8.25%Loan Term: 15 years Monthly Loan Payment: $485.07Number of Payments: 180 Cumulative Payments: $87,312.66Total Interest Paid: $37,312.66 37K IN INTEREST!!! If its me, I will take the flight school slower and pay as I go, and when I am done, if I feel like throwing away 37K I might buy a car. It might take me two years to finish flight school, but 37K is a very high cost to be impatient. I know you can justify it by getting a head start on your career, but surely you can find a balance. Keep the loan to a minimum, if you get a loan at all, and train a little longer working wherever you can to pay for it. Loan Balance: $20,000.00Loan Interest Rate: 8.25%Loan Term: 15 years Monthly Loan Payment: $194.03Number of Payments: 180 Cumulative Payments: $34,924.72Total Interest Paid: $14,924.72 This scenario is much more manageable, although you are still almost doubling the total cost with interest. But if you can afford the payments in scenario 1: Loan Balance: $20,000.00Loan Interest Rate: 8.25%Loan Term: 6 yearsMinimum Payment: $350.00 Monthly Loan Payment: $350.00Number of Payments: 73 Cumulative Payments: $25,490.58Total Interest Paid: $5,490.58 Much better, but not as good as no loan in my opinion. This is strictly my opinion, but you should definitely give it some thought, especially if you're prepaying the school, which of course you would never do, because that would be just plain dumb. Good Luck in whatever you choose, I just want to see you make it to the sky without having to have a second job just to keep up. You may want to be a pilot to avoid sitting in a cubicle, but if you get that size of a loan, you may end up flipping burgers just to keep your dad's house from getting repoed. Edited May 18, 2007 by Sparker Quote Link to comment Share on other sites More sharing options...
klmmarine Posted May 18, 2007 Report Share Posted May 18, 2007 Are you sure you have really thought this through? When you are borrowing two or three times as much as the average college graduate with a beginning wage (CFI) usually considerably less than the average college graduate, how do you plan on making the payments? OH NO!!! Fry has sprouted offspring.... Quote Link to comment Share on other sites More sharing options...
DebosDave Posted May 18, 2007 Report Share Posted May 18, 2007 Just to play the devil's advocate here. Lets look at this another way. A helicopter student can afford the extra $500 per month, but wants to heed everyone's advise and pay as he goes instead of getting a loan where he will have a $500 per month payment. Now, I know there are less expensive and more expensive schools, but let's say training is going to cost them on average $250/hr. So, this person undertakes helicopter training for a career, and is flying as they can, approximately 2 hours per month, as long as the car tires don't go flat, or the power bill is higher than expected (you know usual life stuff). To be fair tax time does come around, where they can purchase a block of time or a couple extra lessons, so we will stick to the 2 hours per month. This training will take them 8 years and 4 months to finish with 200 hours, assuming they can retain commercial standards while extending training for that long. That is quite a while for a kid out of high school who wants to be a helicopter pilot, and is just flipping burgers for a while until he can build hours to start flying for money. Don't get me wrong, I am all about staying out of debt and trying to do things without taking out loans, but it is just not practical for everyone. From what I have seen, the folks that are training to become career helicopter pilots rarely have the money to just pay for training. Most that can afford it are not interested in becoming career pilots. Let's face it, it is going to be a rare person who currently has an extra $25,000 per year to train, and then leave a job so they can CFI for a couple years at a tremendously lower salary, to leave a job that gave them an extra $25,000 a year?? Now with all that said: Helifool, I have to agree with Sparker, I would wait on the second mortgage on the house until you are sure that you know both what you are getting into and that you are sure you want to be a helicopter pilot. Perhaps you can use the first loan, and work on the side to save the money for the rest by the time you need more money? There are a few schools that can get you through for around $50,000. Another option is to just get your Private, Commercial, and CFI, and try to find a job instructing. This might not be realistic, as insurance requirements are usually at 200 hours, so it makes it impractical to build an extra 50 hours without getting an instrument rating... The other thing, and I am sure you have picked up on this already: I personally would never pay all of that money to a flight school up front. This is normally a very bad idea, but is compounded when one is putting up their home for it. It is good policy to find a school where you can pay as you go, and who will treat you like a customer who is about to spend $50,000 or more at their "store". Good luck, my only advice is to really look into what helicopter flying is all about, and I don't mean pulling pitch, I mean what it takes to earn a career doing it. When I started, I just thought it would be some training and then I would get a great paying helicopter pilot job. That is how I went into my training. I don't regret my decision for a minute, but I definately had a point of realization where I knew I got myself into something way bigger than I originally thought, and that it would take much more work than I expected, and most likely at least one big move to pursue this career. I am not saying it isn't worth it, I am saying make sure you know what you are about to get into. As long as you know what is all entailed, flying helicopters one of my greatest personal achievement to date. Good luck with your decision! Dave Quote Link to comment Share on other sites More sharing options...
klas Posted May 18, 2007 Report Share Posted May 18, 2007 All loans have interest, no matter how you cut it. I would do the home refinance, if your dad can afford it - lower interest & you can write it off. Quote Link to comment Share on other sites More sharing options...
DebosDave Posted May 18, 2007 Report Share Posted May 18, 2007 All loans have interest, no matter how you cut it. I would do the home refinance, if your dad can afford it - lower interest & you can write it off. This is a good point, with benefits that I didn't think about. Just make sure it is what you want to do... Dave Quote Link to comment Share on other sites More sharing options...
helifool Posted May 18, 2007 Author Report Share Posted May 18, 2007 Okay just to respond to a bit here. I guess I should have given some background before asking such questions that have such risky potential outcomes. Ive been researching schools, helicopter industry, making the right choice, for about 6 years now. Ive definitely given it good thought and I do know allot of what I'm getting into. Ive been waiting so long because I needed to get my medical squared away with first. Thankfully I finally received my special issuance medical in the mail a few days ago. So now Im off to the races. Yes, taking a loan out for that much with such interest rates is kinda crazy but the options are few to make a dream become a reality. So I'm willing to be in debt and live poorly for a long time. I came to fly not make money and as long as I can get by, Ill be happy. So yeah, Im stoked and ready. I'm leaving at the end of August for Bristow Acadamy. Thanks for all your sound responses!!! Quote Link to comment Share on other sites More sharing options...
zemogman Posted May 18, 2007 Report Share Posted May 18, 2007 (edited) It sounds like you are ready... If you and dad do take a loan...the home loan does have priveledges (i.e. tax deductible interest, etc.) also have dad consider a equity credit line if you can find a really good rate...this way you only take from the loan what you need at the moment and you can pay minimums or pre-pay extra (if you come into some cash) and you don't have 8% interest on $50,000 right of the bat. You will be charged interest on what you use on a monthly basis and being that this is a 2 year endeavor (give or take) this may be the way to go. It is what I'm doing... Just a thought... Edited May 18, 2007 by zemogman Quote Link to comment Share on other sites More sharing options...
helifool Posted May 18, 2007 Author Report Share Posted May 18, 2007 It sounds like you are ready... If you and dad do take a loan...the home loan does have priveledges (i.e. tax deductible interest, etc.) also have dad consider a equity credit line if you can find a really good rate...this way you only take from the loan what you need at the moment and you can pay minimums or pre-pay extra (if you come into some cash) and you don't have 8% interest on $50,000 right of the bat. You will be charged interest on what you use on a monthly basis and being that this is a 2 year endeavor (give or take) this may be the way to go. It is what I'm doing... Just a thought... Thanks, okay more info. How does that work? Are you approved to borrow multiple times whenever you need more?/ Quote Link to comment Share on other sites More sharing options...
DebosDave Posted May 18, 2007 Report Share Posted May 18, 2007 Zemogman's suggestion is the best yet. How a line of credit works is you get checks or some other way to borrow money against your home's equity. They will approve you for a certain amount (based on the equity of the home), and you can take a draw or write a check at any time, basically this increases the amount you have borrowed on the house. For example, you get approved for a line of credit for $50,000, you can go to the flight school and write them a check for $300 for the first lesson, now you have $300 borrowed, and only accrue interest on the $300, until you write another check (or however they allow you to take a draw from the account). This way would save you a bit of money by not paying interest on a lump sum, and will also let you only borrow exactly what you need. And, as stated, will give your father all of the tax benefits that goes along with a home equity loan. Good Luck! Dave Quote Link to comment Share on other sites More sharing options...
heligirl03 Posted May 18, 2007 Report Share Posted May 18, 2007 (edited) Just wanted to point out that it is possible to plan and succeed at paying off loans in vastly shorter amounts of time than the full term (not just flight training loans). Maybe not while training or CFI, but most starting turbine salaries are sufficient to cut the payoff time and interest at least in half and more if you're determined. Many, many sacrifices to be made for this, but you can do it if you plan ahead and know what you're getting into. Make educated decisions. Good luck! Edited May 18, 2007 by heligirl03 Quote Link to comment Share on other sites More sharing options...
helifool Posted May 18, 2007 Author Report Share Posted May 18, 2007 Just wanted to point out that it is possible to plan and succeed at paying off loans in vastly shorter amounts of time than the full term (not just flight training loans). Maybe not while training or CFI, but most starting turbine salaries are sufficient to cut the payoff time and interest at least in half and more if you're determined. Many, many sacrifices to be made for this, but you can do it if you plan ahead and know what you're getting into. Make educated decisions. Good luck! I just got off the phone with Wells Fargo and this is the perfect loan for what I needed. Thank you all for your suggestions. This way I don't have to worry about not having enough to cover school and housing, and I can pay interest only on only what I use. Also I know what you mean about paying it off faster then your term, if I make like an extra $50 per month payment I can pay it off like 5 years earlier. Everything has come together so fast after waiting so patiently for the last 5 years! Quote Link to comment Share on other sites More sharing options...
Sparker Posted May 18, 2007 Report Share Posted May 18, 2007 (edited) I just got off the phone with Wells Fargo and this is the perfect loan for what I needed. Thank you all for your suggestions. This way I don't have to worry about not having enough to cover school and housing, and I can pay interest only on only what I use. Also I know what you mean about paying it off faster then your term, if I make like an extra $50 per month payment I can pay it off like 5 years earlier. Everything has come together so fast after waiting so patiently for the last 5 years! I am not aiming to sound like fry here.... There are some good suggestions here, but I am extremely concerned about the potential conflicts with borrowing against your dad's house. True, if you pay as you go and stuff comes up, it will cut into your training money, but if you get the loan and your car breaks down, your creditors still expect the payment. If you need the loan and are cool with the consequences, get it. Not on Your dad's house. Getting training for a career in helicopters is risky. Any pilot at any time could lose their medical. It probably won't happen, but creditors don't care what happened. Accidents happen all the time. Best of luck, let us know how it goes! Edited May 18, 2007 by Sparker Quote Link to comment Share on other sites More sharing options...
FredR Posted May 18, 2007 Report Share Posted May 18, 2007 I just took out a home equity line of credit with Wells Fargo last month. The interest rate won't lock in until you borrow. We received checks in the mail just like for our checking account and also a credit card to charge against the line of credit. The whole process was fairly painless. Good luck Quote Link to comment Share on other sites More sharing options...
zemogman Posted May 19, 2007 Report Share Posted May 19, 2007 Same with me...mine is with Wachovia...you can lock and unlock amounts as the interest rates go up or down. I also have checks and a credit card...it makes it really convenient...side note --- use the money ONLY for training, it can be tempting when you have 50K at your disposal. Sparker also has good advice...I'm only saying that if you are going for a loan...get one that works the most in your favor...cause mathematically they all work against you until they are paid off. Quote Link to comment Share on other sites More sharing options...
Pazzer Posted August 18, 2007 Report Share Posted August 18, 2007 Just to play the devil's advocate here. Lets look at this another way. A helicopter student can afford the extra $500 per month, but wants to heed everyone's advise and pay as he goes instead of getting a loan where he will have a $500 per month payment. Now, I know there are less expensive and more expensive schools, but let's say training is going to cost them on average $250/hr. So, this person undertakes helicopter training for a career, and is flying as they can, approximately 2 hours per month, as long as the car tires don't go flat, or the power bill is higher than expected (you know usual life stuff). To be fair tax time does come around, where they can purchase a block of time or a couple extra lessons, so we will stick to the 2 hours per month. This training will take them 8 years and 4 months to finish with 200 hours, assuming they can retain commercial standards while extending training for that long. That is quite a while for a kid out of high school who wants to be a helicopter pilot, and is just flipping burgers for a while until he can build hours to start flying for money. Don't get me wrong, I am all about staying out of debt and trying to do things without taking out loans, but it is just not practical for everyone. From what I have seen, the folks that are training to become career helicopter pilots rarely have the money to just pay for training. Most that can afford it are not interested in becoming career pilots. Let's face it, it is going to be a rare person who currently has an extra $25,000 per year to train, and then leave a job so they can CFI for a couple years at a tremendously lower salary, to leave a job that gave them an extra $25,000 a year?? Now with all that said: Helifool, I have to agree with Sparker, I would wait on the second mortgage on the house until you are sure that you know both what you are getting into and that you are sure you want to be a helicopter pilot. Perhaps you can use the first loan, and work on the side to save the money for the rest by the time you need more money? There are a few schools that can get you through for around $50,000. Another option is to just get your Private, Commercial, and CFI, and try to find a job instructing. This might not be realistic, as insurance requirements are usually at 200 hours, so it makes it impractical to build an extra 50 hours without getting an instrument rating... The other thing, and I am sure you have picked up on this already: I personally would never pay all of that money to a flight school up front. This is normally a very bad idea, but is compounded when one is putting up their home for it. It is good policy to find a school where you can pay as you go, and who will treat you like a customer who is about to spend $50,000 or more at their "store". Good luck, my only advice is to really look into what helicopter flying is all about, and I don't mean pulling pitch, I mean what it takes to earn a career doing it. When I started, I just thought it would be some training and then I would get a great paying helicopter pilot job. That is how I went into my training. I don't regret my decision for a minute, but I definately had a point of realization where I knew I got myself into something way bigger than I originally thought, and that it would take much more work than I expected, and most likely at least one big move to pursue this career. I am not saying it isn't worth it, I am saying make sure you know what you are about to get into. As long as you know what is all entailed, flying helicopters one of my greatest personal achievement to date. Good luck with your decision! Dave Very nice, level headed post Dave. Quote Link to comment Share on other sites More sharing options...
fry Posted August 21, 2007 Report Share Posted August 21, 2007 I have been waiting patiently to go to flight school for ten years now. Ive decided to attend Bristow Academy in August. Now my dilemma is figuring out financing. I just got approved for $50,000 over 15 years at 8.25% from loantolearn.com. Has anyone used this company for their training loans? Should I also try for Sallie Mae, because I really will need more like $60,00 to cover full training and housing. Also my dad is willing to refinance the house for a loan. It's such a tough decision to make! 8.25% for 15 years, are you sure? Is that a firm commitment on their part? The reason I ask is because their website appears to show their lowest rate for vocational training at 9% with a term of 20 years. http://loantolearn.com/Education-Loans/Con...-Ed-loan.aspx#1 What would the origination fees be (i.e., are you buying down the rate with an upfront payment)? Also, the website indicates that a payment deferral option is available, how long is the deferral ("six months after graduation" doesn't have much meaning in flight training); and, is the rate higher if this option is selected (e.g., Sallie Mae charges an additonal point for the option)? Here's Sallie Mae's rates, fees and terms for comparison. http://www.salliemae.com/get_student_loan/...Career_training Quote Link to comment Share on other sites More sharing options...
hotrodturbo7 Posted August 22, 2007 Report Share Posted August 22, 2007 hey, don't go to college, either; that 100,000 your parents spent will look real stupid when you start @ 25,000-30,000. Quote Link to comment Share on other sites More sharing options...
jeff732 Posted August 22, 2007 Report Share Posted August 22, 2007 Okay just to respond to a bit here. I guess I should have given some background before asking such questions that have such risky potential outcomes. Ive been researching schools, helicopter industry, making the right choice, for about 6 years now. Ive definitely given it good thought and I do know allot of what I'm getting into. Ive been waiting so long because I needed to get my medical squared away with first. Thankfully I finally received my special issuance medical in the mail a few days ago. So now Im off to the races. Yes, taking a loan out for that much with such interest rates is kinda crazy but the options are few to make a dream become a reality. So I'm willing to be in debt and live poorly for a long time. I came to fly not make money and as long as I can get by, Ill be happy. So yeah, Im stoked and ready. I'm leaving at the end of August for Bristow Acadamy. Thanks for all your sound responses!!! Have you done any saving in those 6 years? Even $100/month would be $7200. Almost enough for ppl. Quote Link to comment Share on other sites More sharing options...
mechanic Posted August 23, 2007 Report Share Posted August 23, 2007 We see this debate a lot here! Right guys.. Anyways, lots of things in the USA are not such a good deal. You see guys buying $55K Ford SuperCrew FX 4X4's or Hummer H2's! To me thats a real waste because you never recover the value back on what you spent if its just a toy for you. I have seen Ivey League Colleges bump in the $100k's plus living and food, while a State College BS Degree for around $16K plus dorm and food. I personally looked at going to Universal Tech Inst, Houston. The tuition was $16K back in 86'. I decided to let Uncle Sam "Pay" me to learn a trade. I spent 6 months in bootcamp and 2 tech specialty programs, then spent a year in apprenticeship. All free with benefits and building vacation time to boot. About a year ago one of our high school workers at the Deere dealer went to the same UTI in Houston took the auto/diesel course, 12 months program, $28K for tuition, plus appartment, tool kit, and food etcc.. Most auto mech or diesel tech's won't make over $60K a year in a career, but few do better than that. He started work while in school at a large Deere dealer in Houston making 12.50 hr, after grad he is making 14.00 hr. I don't know if any of you looked into auto/diesel as a career? But, after the schooling you start your tool collection and it can be anywhere's between $5,000-$40,000 depending on your brand preference and job specialty. The large Snap On box set can bump $20K with no tools in it! So, taking $28+$40= $68K to have a well rounded edu and good set of tools, plus you never have all the tools you will need, so its a never ending deal to keep the tool man in business thanks to the auto/diesel makers. My shop just bought a hydraulic flow/press gage set, $400 bucks, I am glad I didn't have to buy that one! I think the best deal is computor support, computor repair, realestate investments, small engine/appliance repair or something else that is flexible as a part time gig that you can fall back on and help out when the flying gets slim. The biggest hurdle is really knowing what you want in life. I work around cattle ranchers that buy a $36K baler, $9K hay cutter, $5K hay tedder, $75K dollar tractor, have 1000's of acres to pay tax on, new ranch truck, cattle feed, cattle, hay fertilizer, and the list goes on and on. They make a lot of money at times, but also pay out lots of money too. Most live meager to modest but not a rich lifestyle by no means, BUT they are HAPPY doing what they do and wouldn't change for anything. We can't make everyones decision for them. I would say its fair to lay the facts out, like fry and sparker did, and let them choose there route. Good luck with the decision. Quote Link to comment Share on other sites More sharing options...
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