ATP loans

[Brazilian_Pilot]

I have a quick question about ATP and its financing.

Is sallie mae the only lender?

And can u deffer your loans through college?

[killbilly]

I talked to them a couple weeks ago...

Right now, Sallie Mae is the only one they're really working/comfortable with but they are bringing on several other lending vehicles whose programs are not yet finalized.

There are other lending vehicles. I don't know what your situation is, but if you need to finance training, may I suggest some other options:

-Early IRA disbursement
-Loan against 401K (can be done some places)
-Home Equity Loan/Sale of House

etc...

[SkiHigh2002]

You can defer for up to 18 months. During that time you only pay $10/month. After that is when they kill with high interest rates. My suggestion would be to pay it off in the 18 month period. The financing on my $5100 will be about $11,000 if I pay it off over the time they suggest.

Now this is just my situation so don't think this will be the same for you.

[SpiraMirabilis]

Sallie Mae only allows you to defer payments a total of 12 months now. You're still paying interest on the loan during this period, which kills you. Its called 'negatively amortizing' during the 12 mo period.

[jayllamas]

can you consolidate with another company before the deferral date is reached?

[SpiraMirabilis]

You can, yes. But the payments are deferred, the interest is not. For example, on a 44k loan at a APR of 10%, since you're making no real payments on the princaple the interest is pretty much 4.4k a year. So, if you refinance your loan through a different company in month 6 of your payment deferral period, the amount you'd have to have the other finance company pay Sallie Mae would be 44k + 2.2k = 46.2k.

[killbilly]

Do the Sallie Mae loans work like mortgages in that the interest is loaded on the front half of the loan and principal on the back end, or is it like a straight simple-interest loan?

[jayllamas]

Originally Posted by SpiraMirabilis

You can, yes. But the payments are deferred, the interest is not. For example, on a 44k loan at a APR of 10%, since you're making no real payments on the princaple the interest is pretty much 4.4k a year. So, if you refinance your loan through a different company in month 6 of your payment deferral period, the amount you'd have to have the other finance company pay Sallie Mae would be 44k + 2.2k = 46.2k.

Thanks!!

[SpiraMirabilis]

FYI: The interest rate SLM quoted me was 13.25%, which was pretty horrible.

[Brazilian_Pilot]

Originally Posted by SpiraMirabilis

FYI: The interest rate SLM quoted me was 13.25%, which was pretty horrible.

Forget that! im gonna pay for this crap on my own through the local FBO! There is no way I want to pay 600 bucks a month until im 35!!!!

[turbomax97]

Originally Posted by SpiraMirabilis

FYI: The interest rate SLM quoted me was 13.25%, which was pretty horrible.

Yea - 13.xx is what I got too... keep in mind that is + 5.00 prime... blows.

Problem about refinancing is, you're not going to get too much better for a variable interest rate loan unless you have some equity....

Oh and fyi - my credit score was in the 700's and my parents make 6 figures with an 800+ rating.

I'm doing the ppl and acp with the total cost coming to 57,990 + about 3,000 finance charge ... this spread out over 15 years comes to a grand whopping total of 16x,xxx , and a minimum monthly payment of 900 bucks...

WOW

Guess who's going to have to live at his parents for his first year as an FO if he gets a job :-x


The key to these loans is just to pay more than a minimum.... that amount is applied to just the principle, and adding just a few hundred more per month each year can cut down the loan term by half EASILY.

[wheelsup]

Originally Posted by turbomax97

Yea - 13.xx is what I got too... keep in mind that is + 5.00 prime... blows.

Problem about refinancing is, you're not going to get too much better for a variable interest rate loan unless you have some equity....

Oh and fyi - my credit score was in the 700's and my parents make 6 figures with an 800+ rating.

I'm doing the ppl and acp with the total cost coming to 57,990 + about 3,000 finance charge ... this spread out over 15 years comes to a grand whopping total of 16x,xxx , and a minimum monthly payment of 900 bucks...

WOW

For those that are seriously considering taking out loans at 13% interest, SLAP! I just reached out and slapped you. Get a job outta HS/college and live with your parents. If they won't help pay for your flight training at least beg them to let you live there for free or minimal rent and spend two years saving up. Even with a not so great construction or other job you can pull in $30k full time. You can easily save if you are good with your money $45k or so in two years if you have practically zero expenses. Then you are what, 20, and can pay almost all cash for your flight training (especially if you go to a local FBO!)?

DON'T DO IT. Paying that kinda money for a job that starts at around $20k/yr is REDICULOUS. Smarten up here.

Don't be the captain I met that owes $70k on his loans because he put them off for 5 years because he couldn't afford the payments. Even on second/third FO pay, heck fourth year CA pay, $900 a month will cripple your ability to start saving for the future.

[jayllamas]

Guess who's going to have to live at his parents for his first year as an FO if he gets a job :-x


And thats assuming your hub is near where they live.

[turbomax97]

Originally Posted by jayllamas

Guess who's going to have to live at his parents for his first year as an FO if he gets a job :-x


And thats assuming your hub is near where they live.

commute/crashpad....


Realistically though - 900/month isn't as bad as it seems.... after the first year.... it's all about making sacrifices for the future the way I see it. I paid my way cash through college working a full time job and pulling 18 hr semester minimum but I did it... After completing that task and managing money, I guarentee I won't have a problem managing my loan.

[SpiraMirabilis]

It is a simple interest loan.

[SpiraMirabilis]

Originally Posted by wheelsup

For those that are seriously considering taking out loans at 13% interest, SLAP! I just reached out and slapped you. Get a job outta HS/college and live with your parents. If they won't help pay for your flight training at least beg them to let you live there for free or minimal rent and spend two years saving up. Even with a not so great construction or other job you can pull in $30k full time. You can easily save if you are good with your money $45k or so in two years if you have practically zero expenses. Then you are what, 20, and can pay almost all cash for your flight training (especially if you go to a local FBO!)?

DON'T DO IT. Paying that kinda money for a job that starts at around $20k/yr is REDICULOUS. Smarten up here.

Don't be the captain I met that owes $70k on his loans because he put them off for 5 years because he couldn't afford the payments. Even on second/third FO pay, heck fourth year CA pay, $900 a month will cripple your ability to start saving for the future.

I'm going to ask my co-borrower if he'll lend me the money at 5.5% interest, monthly payment would be like 520 and I'll pay it off in 10 years, or probably sooner.

[Brazilian_Pilot]

Originally Posted by SpiraMirabilis

I'm going to ask my co-borrower if he'll lend me the money at 5.5% interest, monthly payment would be like 520 and I'll pay it off in 10 years, or probably sooner.

My parents wont Co-Sign. Im kind of glad though I would probably get my self in trouble if i borrowed that much money.

[surreal1221]

900 a month huh?

60k loan, turns into 160 pretty quickly. Makes me sick.

You guys know there are other places you can goto besides ATP? Although, I will also say, ATP is at the top of the game. Plus, christ, WORK, save a LITTLE money and put it towards your training. Save 15k, now that 60k loan becomes a 45k loan. . . save 20k, turns that 60k loan into a 40k loan, so on and so forth.

[Brazilian_Pilot]

With 15k you can get most of your training at an FBO
then save a little more to get ur multi time.

[surreal1221]

Originally Posted by Brazilian_Pilot

With 15k you can get most of your training at an FBO
then save a little more to get ur multi time.

Which is kinda the point.

Either that, or stay away from these insane loans. Or get married, make sure your wife has a degree, and have her work for a year before you leave the military. Use all of your income to support your family, put her's into a high yielding savings account (HSBC is great for this) and then when the time comes, pull out what you need to get a reasonable loan to help with the training some.

Maybe that's just me. . . yeah, probably is.

[killbilly]

Originally Posted by surreal1221

Which is kinda the point.

Either that, or stay away from these insane loans. Or get married, make sure your wife has a degree, and have her work for a year before you leave the military. Use all of your income to support your family, put her's into a high yielding savings account (HSBC is great for this) and then when the time comes, pull out what you need to get a reasonable loan to help with the training some.

Maybe that's just me. . . yeah, probably is.

When I first started out looking seriously at training, I did drink the Massive Loan-Flavored Kool Aid. I have since re-thought the plan.

Which is why I am

a) going to nail down some more college credit hours - the goal is to complete degree and first parts of flight training about the same time. While working full-time.
b) Will borrow SOME money for flight training, but no more than 30% - that's the max.
c) Will likely complete PPL and IFR (in cash) before doing any borrowing. (see (a) above)

SLM is alluring until you fire up a loan amortization calculator and determine just how long 15 year payouts really are, ESPECIALLY when you look at what you spend on interest. And I thought mortgages were daunting. When I really crunched the numbers against cost of living, budget, etc it scared the hell out of me.

[SteveC]

Smart move killbilly.