What do you guys think about this loan package!?

[EMmariano]

Hello guys, I am pretty new here. So please welcome me.

I am a 22 year old philosophy graduate, and currently working. I intend to become a commercial pilot one day but I dont have the resources to send me into one. But then, there is this loan package called "study now, pay later" from a major airline in my country. They offer pilot training that would lead to a commercial pilot license with an instrument rating, and 217 flight hours under my belt.

Here is the details:

I had summarized the loan details. Its a rough estimate for now, but this is generally what its going to be. I had indicated which part I am not sure about or only a rough estimate;

a.) The loan is immediately payable after 2 years. (so there is a two year leeway)
b.) The loan is 15 years to pay.
c.) The original $40,000 will become $60,000 in the 15th year. If we follow the monthly paying rate for 15 years, so the end interest is $20,000.
d.) Three missed payment, they will take the collateral. (Not sure if it has to be consecutive or not)
e.) Parents income must be above $3,000 a month.
f.) The loan needs a collateral. And only 75% appraisal value of a collateral will be credited for the loan.

I have the necessary requirements and we have a collateral, and my parents earns pretty much that $3,000 a month requirement.

My question is if it is wise for me to pursue an airline business during such economic crisis? Although the airline that would provide my training does prioritize their students for an opening in their ranks.

Do this 217 flight experience will get me anywhere landing a 2nd officer job? Thanks!

[Greg Bockelman]

Hello guys, I am pretty new here. So please welcome me.

Welcome to the board. Advice is worth what you pay for it here.

I intend to become a commercial pilot one day but I dont have the resources to send me into one. But then, there is this loan package called "study now, pay later" from a major airline in my country.

Hmm. What airline and what country? There are places in the good ole USA that are more than willing to take your money and make promises they cannot deliver.

More to the point, I am not an advocate of going into debt for stuff like this. You tend to build up a bunch of debt and then don't have the job to pay it off. You have to be very careful when contemplating going into that much debt.

c.) The original $40,000 will become $60,000 in the 15th year. If we follow the monthly paying rate for 15 years, so the end interest is $20,000.

That is a tad less than 6% interest rate. Red flag one for me because that is a low rate for this kind of loan.

e.) Parents income must be above $3,000 a month.

That means they are on the hook if you default. HUGE red flag number two, for me.

f.) The loan needs a collateral. And only 75% appraisal value of a collateral will be credited for the loan.

What is the collateral? Another flag.

I have the necessary requirements and we have a collateral, and my parents earns pretty much that $3,000 a month requirement.

How do they feel about losing the collateral if you default?

My question is if it is wise for me to pursue an airline business during such economic crisis?

The time to prepare for a career in Aviation is when times are bad. That way, when things pick up, you are in a position to take advantage of it.

Although the airline that would provide my training does prioritize their students for an opening in their ranks.

That is a plus, but how much are you willing to bet on this? The financial stakes are pretty high.

Do this 217 flight experience will get me anywhere landing a 2nd officer job? Thanks!

Depends. What does the sponsoring airline have to say about that? Otherwise, 217 won't get you much especially in this economy.

My advice is to not go into debt. But that is me.

[JJBAKER]

And Greg is not alone with his opinion!
My flags are the same.

[Luvrv8]

That comes out to about $184.33 per hour. Is there any multi time in this? looks too cheap for it to be included. I also agree with the above posts.

[EMmariano]

I'm from the Philippines. And the airline that offers that training is Philippine Air Lines. The bank that would offer this loan package is closely related to PAL since it is owned by the same person.

I guess, most of our local pilots here are being absorb by international ones since they are offering them much higher salaries. About 3x as much as what they would normally earn here.

--PS I am in the process of answering "Greg Bockelman". eheh

Thank you guys very much for giving your thoughts and advice regarding this endeavor.

[EMmariano]

Here are the details regarding the training guys.

Breakdown of Ab-initio training curriculum that would qualify a trainee
upon graduation for a Commercial Pilot License with Instrument Rating:

A.) Private Pilot Training Course:
i. Ground Training - 145 classroom training hours,
ii. Simulator, Basic Instrument Flying Procedure – 10 hours, and
iii. Flight Training – 53+30 hours.

B.) Commercial Pilot Training Course (with Instrument Rating):
i. Ground Training – 123 classroom training hours,
ii. Simulator, Advanced Instrument Flying Procedure – 20 hours, and
iii. Flight Training – 163+30 hours

Upon graduation, a trainee will have logged 217+00 flight hours to his
credit.

[Sdloco27]

Does also include multi? You might want to check on that since it would add to that cost.

[EMmariano]

Reply to Greg Bockelman. Thank you very much for your questions.

Hmm. What airline and what country? There are places in the good ole USA that are more than willing to take your money and make promises they cannot deliver.

I'm from the Philippines.

That is a tad less than 6% interest rate. Red flag one for me because that is a low rate for this kind of loan.

The airline that offers that training is Philippine Air Lines. The bank (Allied Bank) that would offer this loan package is closely related to PAL since it is owned by the same person.

What is the collateral? Another flag.

I got my parents' approval to use our house in Manila as a collateral. Its probably worth around $70,000 in my estimate. Since we have a neighbor that sold their house at $44,000 but is only half of what our lot area is.

How do they feel about losing the collateral if you default?

Although this might happen, we do have another house just outside of Manila. We can stay there if anything goes wrong.

But I had thought about this, so I have another back-up plan. There is this government monetary assistance agency called PAG-IBIG, that can provide filipinos a way to purchase their own house. I just need to be a contributor of this agency for 2 or 3 years, and the monthly payment is very, very cheap (I'm shy to say it here, since its very cheap hehe). Then I can take out another loan which is a 30 years to pay, with very low interest rate. Which would enable me to buy my parents' house that we had used as a collateral to pay for the training, and transfer the property to my name. So in short, if I can buy my parents' house and transfer the title in my name, and the money that I used to buy it, will be use to repay Allied Bank's loan package.

Back-up Plan Summary:

Allied Bank's Loan Package
-2 years leeway, before the my very 1st repayment of the loan.
-if in an event that we cannot afford to repay the loan through normal means, i would take out another loan from a government agency that offers very low interest rate, and is payable in 30 years.
-thus saving my parent's property, repaying the loan completely and transferring the title to my name.

The time to prepare for a career in Aviation is when times are bad. That way, when things pick up, you are in a position to take advantage of it.

Thank you for such encouraging words. Hehe.

That is a plus, but how much are you willing to bet on this? The financial stakes are pretty high.

Realistically speaking, it would be hard, if not even remotely possible for me to land a aviation career immediately after graduation. I was hoping to be able to prove myself in the training so that they might offer me a co-pilot job within PAL, or they might really consider me since they claim to prioritize their graduates. I hope this is true.

Depends. What does the sponsoring airline have to say about that? Otherwise, 217 won't get you much especially in this economy.

yes sir, i had noticed that. Even Philippine Air Lines do require 500 flight experience. but they would prioritize their graduates into a job in their air lines if there are vacancies. They tell me that they are prepared to waive that flight experience, if ever, for their graduates.

any ideas how can I earn easy and cheap flight hours?

My advice is to not go into debt. But that is me.

Thank you for this. I really appreciate it. I promise that I will take all your help in serious consideration.

[jeff_steniel]

good day,

jerry here from philippines. i want to be a commercial pilot too.. but my financial is not enaf to sustain my dream..

goodluck!

09174984444

[BKMirage]

Understand that when it comes to mapping out a carreer, 'hope' is an extremely poor and unreliable planning tool. Unfortunately, in your posts up to this point, I'm hearing it a lot.

I'm not trying to discourage you...I firmly believe there will be a pilot hiring boon between the middle and end of the next decade. If you were going into medicine or any number of other carreers, I'd be encouraging you to absolutely go for it.

However, in today's economy, taking out a big loan and putting family assests at risk for something as unstable as a possible commercial pilot job is a pretty big roll of the dice. I would caution you to not bet more than you could afford to lose if by chance things don't go exactly as you hope.

[rich-allen]

Understand that when it comes to mapping out a carreer, 'hope' is an extremely poor and unreliable planning tool. Unfortunately, in your posts up to this point, I'm hearing it a lot.

I'm not trying to discourage you...I firmly believe there will be a pilot hiring boon between the middle and end of the next decade. If you were going into medicine or any number of other carreers, I'd be encouraging you to absolutely go for it.

However, in today's economy, taking out a big loan and putting family assests at risk for something as unstable as a possible commercial pilot job is a pretty big roll of the dice. I would caution you to not bet more than you could afford to lose if by chance things don't go exactly as you hope.

This is the best advice I've heard in a very long time.
My brother is a commercial pilot with 15 years behind him. While he does currently have a job, it hangs in the balance with the economy.
I'm afraid we only started to feel the economic crunch as it's going to get much worse before it gets better. The US dollar won't be worth piss when this administration is finished (the republicans aren't any better).

The dollar drives most of the worlds market, when it's over inflated or devalued, people don't travel. Without travel, most pilots are dead in the water.
Don't listen to the administrators at these flight schools. Even with promises of life time job placement, it will be next to impossible to find a job fresh out of school.

I wish you the best of luck in your endeavors.

R. Allen

[krush]

I know quite a few airline pilots and they say STAY AWAY!!!!!! There are thousands of qualified furloughed pilots around the world right now.

If you really wanna get paid to fly, try to get into the military, that's what I'd do.