Student Center: Financing

Financing Options

We know that flight training is a major investment and have added some great programs that offer you the option to finance your training and personal expenses. Whether you are working towards a Private License or advancing into a career in aviation; one of these options can make the difference.

Deciding how much to borrow

Borrow only what you absolutely need to cover the cost of your education.
If you must borrow, accept only what's necessary to cover your training costs (tuition and fees, housing, meals, books, personal expenses, and transportation). Remember, when it's time to repay, you'll have other financial obligations as well - like rent, a car loan, and living expenses.

Financial professionals recommend that monthly student loan payments be no more than 10% of your monthly income (before taxes). The more you earn, then, the more you can borrow.

That's why it's important to calculate how much you'll be expected to repay on student loans each month and compare that amount to what you think you'll earn after graduation. Ask yourself these two basic questions:

Understanding the cost of borrowing

Interest
It seems simple: You borrow money; you pay it back. But the amount you have to repay is more than the amount you borrowed. Why? Because of interest.

Interest is what lenders charge for the use of their money and to cover their costs for servicing your loan until it's paid in full. The total interest you pay depends on:

Interest rates on private loans are variable and are based on the borrower's credit rating and/or that of a cosigner (if applicable).

Fees
You think you're borrowing just the right amount. But when the money arrives, you see it's less. What happened? Various fees, which vary by loan program and lender, have been deducted from your loan proceeds. You should learn about the fees associated with each loan to avoid any financial surprises.

Cosigning a loan

Private student loans are credit based. That means not only do they require an acceptable credit rating but, in many cases, the better the rating … the lower the interest rate.

It's important to realize, though, that cosigning a loan or asking someone to cosign one for you, makes another person just as accountable to repay that loan as the borrower.

This section will help you decide when it is to your advantage to consider a cosigner, provide a brief overview of cosigner rights and responsibilities, and direct you (or your parents) to the next step in cosigning a loan.

When to consider a cosigner

There are two instances in which a creditworthy cosigner is helpful:

As a result, if your cosigner has excellent credit (and you do not), you are likely to benefit from a loan with lower rates and fees.

Having a cosigner could save you a lot of money!

Cosigner rights and responsibilities

A cosigner is guaranteeing the debt. That means you (or your parents or spouse, if they are the cosigners) will have to repay the loan if the borrower does not. It's critical that you understand and want to accept this responsibility and that you are aware of the following:

Be sure you can afford to repay the loan. If you're asked to pay and you cannot, you may be subject to collections efforts and your credit rating could be damaged. Even if you're not asked to repay the debt, your liability for it may be included in computing your debt-to-income ratio and may prevent you from getting approval for other loans.

Under federal law, creditors are required to give you a notice that explains your obligations as a cosigner. In addition, make sure you get copies of all important papers, such as the loan contract and the Truth-in-Lending Disclosure Statement.

Loan Options for Flight Training

Credit Union Loan Options for Flight Training with Group 3 Aviation

Traditionally with credit unions you will have to pay a membership fee that ranges from $1.00 - $25 annually – in many cases all you need to do is open a savings account with $25.00 and you can receive member privileges.
https://www.premier.org/home/home
https://www.wescom.org/index.asp

For those people looking to use a service like direct P2P loans in the USA here are a few options to consider: