$25,000 Flight Training Loan

[HeloJunkie]

After reading many of the posts here concerning flight training, I realized that I may be able to help some of you out there looking for a loan to start your flight training. Maybe not, but I figured I would share the information with the group and maybe someone could benefit.

 

 

To start, let me be 100% honest in telling everyone that the website I am going to point you to is one that I have been an active member of for several years, but as a lender, not a borrower. For me, its a simple business investment, but after looking over all of the loans that have been funded, it appears that some are using the money for flight training.

 

The website I am talking about is http://www.prosper.com

 

Prosper.com is basically a website where you can apply for a unsecured loan of up to $25,000 with repayment terms up to 3 years. The way it works is that you build a profile which includes pictures of you, your interests, your credit history (if any) and how much money you need and what you will be using it for.

 

You post this (costs you nothing) and then people "bid" on your loan. You are much more likely to get a loan at Prosper that at a bank because people like me are grouped together to create the funding for you loan. So out f the $25K you may be loaned, I may only make up $50 of that loan, and 58 other people may make up the rest.

 

The interest rate you are charged is based on your credit rating (or lack thereof) and how many people are interested in loaning you $50 each (or whatever). The more interested people are in you and your loan, the less your interest rate.

 

Forbes called Prosper.com the "Ebay of Loans". There are no banks involved, just everyday people like me working to help other people. I spread out the number of loans that I am involved with and the amount so that my exposure to dead-beats is limited. Because of the way this works, you may be able to actually get a loan to start flight training.

 

 

A couple of things you should remember:

1) The interest you pay on a loan at Prosper.com may not be the best interest in the world. You should take a look at other methods of borrowing money (family, friends, bank) before using Prosper.com unless you have fantastic credit (AA). If you have bad credit and have exhausted other possibilities, Prosper.com may be a great option for you.

 

2) Prosper.com does check your credit and every certified lender that is interesting in bidding on your loan will have access to your credit history. Be very prepared to explain anything adverse on your credit report. The people that are making the loans are everyday people that may understand your circumstances, but only if you explain them. In my experience, if you do not explain yourself upfront, your loan may not be funded.

 

3) Remember, the lenders are just people. Not banks, not corporations...just normal people. When you create your profile and your "story", make it as personal as you can. Take time to look over other peoples loan apps on Prosper to see how they look and then make it your mission to become a real person to the lenders.

 

4) Prosper.com handles everything for you if your loan is funded. You can see who provided the money, but your monthly payment goes to Prosper.com and Prosper.com distributes those funds. No big hassle or screwing around trying to figure out who to pay or for how much.

 

5) Prosper.com DOES report to all major credit agencies. Failure to pay your loan will result in negative entries on your credit report and the inability to ever use Prosper again.

 

6) Once you have repaid your loan, you can apply for another loan with Prosper.com thereby helping further your flight training education.

 

7) IMPORTANT: Your loan with Prosper.com has a repayment that begins IMMEDIATELY. It is not like an educational loan where the payment is deferred until you stop classes!

 

8) READ everything at Prosper.com and MAKE an INFORMED decision. I DO NOT work for Prosper.com, but I have been an active lender for several years. YES, I make money on my loans, that what I am doing it for, but also to give people who would otherwise have not been able to get a loan any other way a change to get a loan. PLEASE - Use your common sense and make a sound decision based on your personal circumstances!

 

I would hope that this site may help some of you folks out there trying to find a way to pay for your training. As I said above, please use your best judgment with this or any other type of loan, including using your credit cards to fund your flight training. The interest may be the same!!

 

Happy Flying

[67november]

I've checked into prosper.com be aware of this, many states put limits on these people offering their loans. for where I'm at the site is worthless to me as the caps are so low is not doable AT ALL for aviation.

[Copterpilot213]

I'm going to look into this, thanks for the info. I need to fund 12 more flight hours to complete my CFI training due to a certain school abruptly closing recently 2 weeks before my checkride. Thanks for the info HeloJunkie!

Edited March 3, 2008 by Copterpilot213

[HeloJunkie]

I'm going to look into this, thanks for the info. I need to fund 12 more flight hours to complete my CFI training due to a certain school abruptly closing recently 2 weeks before my checkride. Thanks for the info HeloJunkie!

 

 

No Problem CopterPilot213 -

 

 

As I said above, I know people are using Prosper for flight training, just make sure you read over everything and hopefully you can get a loan to cover those last 12 hours!!

 

Good Luck with your CFI training.

[bqmassey]

I'm sure this question won't have a straight forward answer, but... what kind of interest rates people getting on Prosper? For someone with average credit, what range of interest rates would ya see on $25,000?

[HeloJunkie]

I'm sure this question won't have a straight forward answer, but... what kind of interest rates people getting on Prosper? For someone with average credit, what range of interest rates would ya see on $25,000?

 

 

Your right BQMassy - kind of a hard question to address, but I will try -

 

 

Basically, the better your credit rating, the better the interest rate you will be getting. However this is where free enterprise really plays a role. Even with less than perfect credit, I have seen interest rates lower than what you would expect. Unlike EBay where each bid drives the price up higher, at Prosper, each bid on your loan drives the interest rates lower!

 

If you go to Prospers site, there is a "guide" on what the various interest rates are based on credit ratings. I think AA is around 7.7% and NR and/or HR (not rated or high risk) are over 20%, basically the same as a credit card.

 

The big difference is that many people have received loans via Prosper after being turned down by many credit card companies. As an individual, I am willing to risk $50 for a 10% or better return on my investment.

 

Again, I would highly recommend anyone interested to take a look at Prosper, read the FAQs, read over other people comments and see what it is all about. Ask a lot of questions until you get your answers. It will not be for everyone, but it may be useful for some. If you ahve access to a HELOC, I would submit to you that it will most likely be cheaper than the loans at Prosper since they are unsecured and by its very nature, higher interest.

 

The other thing to remember is that you are not committed until you take the money. If, after your loan is bid on and the bidding closed, you don't like the interest rate, you just don't take the loan.

 

The last time I checked, Prosper had over $30,000,000 in outstanding loans.

 

Hope this information helps!

Edited March 3, 2008 by HeloJunkie