Pilot Financing
 

Hey APC,

I am in a bit of a predicament. I am a 20 year old with my PPL and I'm looking to get the rest of my ratings. Problem is I have no money. There are 3 different flight schools near me. Phoenix East, ATP and a smaller school called Epic Flight Academy. Of the 3, Epic Flight Academy is the cheapest. They quoted me just under 30k for my instrument through to a MEI. They guarantee a CFI job after 3 months of non paid instructing. From what I've seen this is a pretty decent deal. Only thing is they have absolutely no financing. Now I don't know about you guys, but I don't have 30k sitting in my back pocket!
I guess what I am trying to ask is if anyone has ever had any luck finding a lender for flight training under similar circumstances.

For the love of god, DO NOT do this, you are ONLY 20 find a job and scrounge your way through it with a CFI. Take it from all of us, this is a bad idea. You'll be so far ahead of everyone else if you get your ratings over a few years. There is no hurry and anyone telling you that you need to get "done as soon as possible" and "build hours as fast as possible" is certifiable crazy or just trying to get your money. If may of us had to go back and do it again, this is one of the biggest things we'd do differently.

I have to disagree slightly here. Seniority can most definitely be a huge factor in ones professional flying career. However, being as young as you are at 20 you have more time before the seniority building is even possible since 121 airlines can't hire till 23 now. So, you can get a job and get all your ratings probably within three years maybe even 1.5 years if you financed some of it or whatever. YES you can get loans through Sallie May to answer your question although I would try to stay away from fully financing it etc. I myself am 22 and I will have all my ratings come February, I just graduated from college as well with my four year degree. If nothing else try to get a job at an airport etc and flight train more and as a PPL be a safety pilot for instrument rated guys to practice etc for some time. Bottom line is there are ways to make it work and I know it feels like your a million miles from where you wanna be but you'll get there.

Before you do that consider this. What happens if you accumulate all that debt and DON'T get the job you want or are hoping for? What will you do then?

Oh please. It's all about luck and timing. The shining regional star of today may have 10 year upgrades or furloughs tomorrow, not to mention what might happen at the major level. You might be desensitized to everyone who has tried to convince you to DO IT NOW and DO IT FAST, but seeing that you don't really understand the industry yet, I'd say wait 5-10 years before commenting on this and then get back to us...

You are right though, there are ways to make it work. Many people try to take what they figure is the "easy" route and get a loan and get it done, but it ends up harming them far more in the long run, trying for 10, 15 or more years to pay off loans struggling on regional pay, all the while throwing away the ability to start saving money or buy a house in a reasonable amount of time. If you work on the ratings while staying out of debt, you'll end up 10 years ahead in life, rather than 2 or 3 years faster at the airline. Seniority doesn't matter for **** when you have to change airlines or something happens that stalls out the movement. QOL means a lot more than seniority, and if huge massive retirements happen due to age 65, they'll continue to happen and people will flow anyways, whether it's a year from now, 5 or 10 or more...

W. T. F. ?? :eek:

Seriously?

3 months unpaid instructing??

No wonder it's so cheap!

Good luck getting a loan for that.

"So, how are you going to pay us back if you are working for free?" :rolleyes:

Pilot Financing
 

Go military.

Yeah there's a name for that...
I think it's called: SLAVERY.

Yea exactly.. Maybe if it's the cheapest place and a decent flight school as far as receiving instruction fine, but totally different when looking at being employed.

I never said I was in favor of getting loans, I just answered his question. The whole airline industry looks better for the next decade as far as hiring than it has in the last decade, I never said anyone was a shining star or a guarantee. Anyone in this industry that has those type of notions won't be here very long anyway.

I myself am debt free as a 22 year old college grad and I have most of my flight training finances through MEI in my bank account so no loans. I made this work for me but some people aren't as lucky and what I was saying is there are other risk mitigated ways as well including getting loans (WHAT RATE ARE YOU GETTING AND HOW MUCH) because I had an approved fixed rate of 3.8% on 25,000 when I thought I might need it. That's easily payable on a $25,000 instructor salary etc.

Join the guard or reserves and use the GI Bill to pay for flight training and college.

A decade ago people were saying the exact same thing.... just sayin'

A decade ago the pinnacle of MANDATORY RETIREMENTS weren't right around the corner.... I never said there was a pilot shortage as your slighlty referring to in how you responded to that, however I believe there is a shortage of the "Willing" I think. So the fact that hiring IS PICKING UP.. More jets being produced, more pilots retiring, more people traveling, MORE PILOT HIRING...

Got news for you, they didn't hire all the current pilots in one year. Yes, there was a slight hiccup with a 5 year "postponement", but people are retiring all the time. If anything, you should learn from the age 65 rule: So many pilots were desperate to come out with something after their airline previously folded (TWA, etc) and they were left with nothing so they were forced to keep flying and on the job well into their late years. This was a windfall to the pilots who had to switch airlines or had to go through massive downsizing/cuts. Look past how great it is going to be for you that hiring is going to be trickling and realize that there are much more important things than getting pilot ratings super fast, like saving up money for retirement and having financial flexibility. More jets being produced? Well, sure, but have you seen how many are abandoned in the desert? Even 757s now. Are more jets being produced to expand flying at the major level, or to replace old aircraft and cram more people into a confined space? I'm not trying to be all doom and gloom intentionally, but the idea that "the best time" is right around the corner has been the greatest myth perpetuated in the training and recruitment environments.

Got news for me??? Who the heck said anything about all the pilots being hired in a year? The mandatory retirements are only beginning their cycle... It stretches well into 2030 from the industry/pilot statistics... As far as money for retirement, etc being of importance... Your not telling me any new news... I paid for a 4 year degree, have saved for ALL my flight ratings, and am debt free so I think I'm doing ok for 22.. Just saying thats not really what we are talking about here. Again, there has never been nearly as many retirements as there are going to be in the time period I've just laid out, NOT A YEAR....

OK, so I can get financing through Sallie Mae this way? That was my question thank you.

As far as is this a good idea, I do not see why not. I currently have no debt, a ppl and close to 200 hours. My college is already fully paid for, so I won't spend anything on that. I will pay for as much as I can myself, but I don't think I'll be able to save up enough before I turn 22 or 23. The full cost a training might end up being something like 22k since I already have a lot of time built.

The way I see it. There doesn't seem to really be a way around around the costs of training. It's cheaper at a 61 school sure, but it also takes longer and often requires repetition if you are paying as you're going. So, in the end what am I really saving.

I only make about 13k a year now, why wouldn't I just invest 25k now and get a cfi job making 22k - 28k? I would end up making more in the long run wouldn't I? Not to mention what 1 year or 2 of seniority can mean, Sorry I'm just not seeing how this is a bad deal. I'm young everything is gonna suck at first, but of all the schools I've visited this one sucks the least.

Stirrin, glad I could answer your question. You sound like your in pretty much as good of a position as one could hope for IF getting loans is the plan and going forward without too much difficulty. I am debt free like you and was set for a loan of $28,000 until I found money elsewhere without interest and no timeline (AKA Family).. I wasn't worried about the loan though at 3.8% with no early repayment penalties.

First, you will need to convert your PPL into a Private Pilot Certificate because that is what we have in the US.

Second, most of the cost of the commercial certificate is building time. You are well on your way at 200 hours to the CASEL cert. Start by getting the instrument rating and your time will be close to Commercial. Then get CASEL/CAMEL and you are immediately employable with just 2/3 ratings that you have had to pay for. Look around for a job at that point, if after a set amount of time you don't find a flying gig then pursue CFI...

This way you are not "all in" financially when you could have saved some cash. I instructed for 6 months and then got hired at a 135 place. My CFI is not even being used now and I can't get a refund.

There don't seem to be a whole bunch of low time pilot jobs out there.

I would say tread carefully man. While loans can be survivable and sometimes a good idea, you have to watch your step.

When I wanted to get my PPL I was going to get a loan because I wanted to do it all in one shot instead of spread out over a longer period of time. I went to a lot of misc. lenders and when you are young and don't have much credit history it can be tough. Pilot Finance tried to hook me up with a loan at a laughable interest rate. It was 8.5k for the training and they were going to charge me 12.5k total! They're reasoning was if you made all payments on time you would get a 3% rebate on the interest, but even still, it's crazy.

Bottom-line don't settle for any high interest loans just because you are determined to get the money. Once you sign for it you are in.

The only good position in regards to getting a pilot loan is before you get one. But feel free Op to get a loan. There are plenty of threads on the topic and even some post on here from professional pilots telling you not to do it. Unless you got money in the bank from family, a loan is a stupid way to go if you don't have any real means of paying it off... and that includes working as a CFI for $25K a year.

I will guarantee this. If you take the loan you will be living in your parents basement for a long, long time. So I would talk to your parents first and let them know you'll be sharing the sofa in the basement with Rover for a couple years...

Pilot Financing
 

Hey RNav.. I was gonna get my $25,000 loan and have to only pay $272 a month for it with no penalties for early repayment. I never said getting a loan was THE WAY TO GO, but you putting the damnation to it is uncalled for. You ultimately said anyone making $25,000 can't afford $3600 a YEAR and going down from there for there loans???? That leaves over $21,000 to live on for the year and that's completely within reason to do under this guys circumstances. I'm saying I'm an advocate for the people who make this work for them because I'm completely confident I could in this situation.

Hey RNav.. I was gonna get my $25,000 loan and have to only pay $272 a month for it with no penalties for early repayment. I never said getting a loan was THE WAY TO GO, but you putting the damnation to it is uncalled for. You ultimately said anyone making $25,000 can't afford $3600 a YEAR and going down from there for there loans???? That leaves over $21,000 to live on for the year and that's completely within reason to do under this guys circumstances. I'm saying I'm an advocate for the people who make this work for them because I'm completely confident I could in this situation.

CFIs make 25k a year? That's news to me..

I thought it was a good example of a "low paying" but still affordable means to safely secure a loan in this situation. As far as "what a CFI makes" it obviously varies as much as this industry.

May I ask your opinion to the starting pay of the average CFI if your going to comment...?

I know I'll make around $25K starting out as CFI where Im going cause it's in a contract with the base salary about that.

My opinion is that most CFIs make much less unless you are maxing out flying everyday at a busy flight school.

Being that you are going to ATP, I assume you are talking about the Guarenteed CFI job? If so, Before you CfI there, you will go to Jacksonville to answer phones while doing the instructor Proficiancy program, then you wait to be assigned an airport to Cfi at, then you begin instructing. (You may already know this but I wrote it incase you didn't)

As far as how much you will make, ATP says CFIs make APPROXIMATLEY 1800-2200 per month. You can make more but can also make a lot less.

I don't suggest anybody take out a loan for flight training, it just isn't worth it, and 3.1% is very low, not everybody can get an interest rate that low..

Interestingly, the local TV station's website had a slideshow of top 50 paying jobs in South Carolina. Obviously these folks have been employed at these jobs for some time.

50. Commercial Pilot 78K
30. ATC 85K
18. Airline Pilots/co pilots and FEs 92k

Source: US Bureau of Labor Statistics

Slideshow Landing Page - wistv.com - Columbia, South Carolina |

I didn't know flight engineers still existed let alone made 92k a year!

Yea now we are talking! Indeed you picked my brain here and followed me on final. Yes, not everyone can but even around 5% is still pretty doable on that type of pay. I have been in close contact with people from ATP including personal friends, two just went through the proficiency CFI program and were given their locations in three weeks. So definitely not answering phones etc for mor than a month or so after finishing. Also, most everyone is meeting the contract pay for ATP and some say they are getting about $3200 per month.

That threw me too. UPS (air hub) and FedEx both fly here. Are there 727s left? Or maybe it's just "covering the bases".

EDIT: "covering the bases" might turn out to be punny. Are there "FEs" on C17s out of CHS? Would they make that much?

OP,
My suggestion is that you avoid financing. You're only 20. If you are on track for a 4 year degree, finish that first. Work as much as you can for some cash. Put as much in the bank as you can, and when you finish your degree, see where you are financially. If you still need to borrow money, you'll need to borrow much less. College will be behind you, so you can concentrate totally on flying.

If you really want to save some money, buy a plane to build your time, fly it like crazy to get your ratings, and sell it. But if that isn't an option, work and stockpile cash, then finance the difference.

CFI pay will likely bring you around $1000-1200 a month, after taxes, give or take. First year regional FO pay won't be much better. You'll need to pay rent ($500 with a roommate, NOT including utilities or cable), health insurance ($200 or more a check), cell phone ($80-100?), gas for your car ($150?) and any other bills before making your loan payment. Oh, and you have to eat, which is no small thing. Just using those numbers, you might only have a few hundred dollars left over. And none of this takes into account the cost of commuting, if you choose to do that.

So, you really need to think this through. You can't discharge a student loan in bankruptcy. I spent a lot of years as a regional captain listening to my FO's complain about their finances and their loans. Many just stopped paying, and their credit is destroyed. The majors look at your credit history, and I have to believe that it affects their decision on you.

You will essentially be financing a new car, but you won't have a car to sell if you need to liquidate and get cash.

No FEs on the -17, just two pilots and the loadmaster. FE are enlisted aircrew so I don't see any enlisted coming close to making that unless they flew A LOT.