What to do when loan is denied?

[DaiLo]

Ever have one of those days? Go to Key Bank's website, try their online thing and get a no?!?!
I know that not all off you out there accepted it. So what did you do?
They said it's for "Default/collection" I will find out more about it, but it's not entirely true. I did have it twice in the past, but it's all payed off now. (Back ground, once with ATT Wireless, I owed about $125, was unemployed, tried to explain to them, they forwarded to collections, by that time I had a job, and paid it off. Secondly was Verizon, I owed $35 one month phone bill, I had moved, but they kept sending all the notices to the old house. By the time I figured out what was going on, same deal, went to collections, paid it off.)
I have paid everything off. (not including 2 credit cards, but I pay those on time) No one has lost money on me. That being said, I realize that my record is blemished. But is that the end of it?
And my real gripe is with the cosigner. My girlfriend is a Pharmacist for CVS, and has excellent credit (Just got approved for 2 houses, but only bought one). I thought the cosigner was supposed to strenghten me up.
I know I should try the 2 Mae's butI was really thrown off by the denial.
(I figure this would probably be better in the flight training section, but thet're all school specific, so I tried here).
Thanks, Chris.

[hammer]

My suggestion would be to avoid Key ... they were the primary lender for the 300+ students from ATA. They've got a couple of very questionable practices ... dispersing the $$ and charging interest well before your class date, much higher origination fees (9% of the total loan if you don't have a cosigner) than other banks, etc. They aren't very well regarded in the industry ... and I'm not just saying that because I owe them some money.

[SteveC]

My suggestion (and I know it won't be popular) is don't go in debt. Debt will eat you alive. Tell Key and the rest of them to kiss off.

Instead, work two or three jobs for a couple of years and stash every single penny you can away to pay the upcoming school bills. Eat mac & cheese or them noodle things instead of going out to the restaurant. Scrimp, save and be as tight as my old Dutch uncle. Or pay as you go with a local FBO. Any way that you can, end up in a position where you can start earning a very meager living by flying, instead of earning a meager living by flying and owing even more than you'll make for the next ten years to some rich banker.

It's tough enough to survive on what low-time pilots earn, much less try to pay off $30,000, $40,000, $50,000 or more in loans. Better to have to work extra jobs now than do it while trying to fly full time as well. Extra jobs and long hours don't add to someone's life expectancy when working most of the lower paying entry level aviation jobs, you know.

If this dream is really worth it for you, you're going to have to make some sacrifices somewhere along the way. Better (again, in my opinion) to do the painful part up front, rather than have to live with the pressure and worrys for years down the road. Sacrifice now and enjoy it later.

Just my opinion...

[TheWife]

If you do decide to apply with other companies I would do it SOON! Everytime your credit is checked you get a hit against your score, but it usually takes up to 30 days for the hit to show. If you wait till next month your new bank or person you apply with, will see the hit and no loan following, making the assumption you were denied by them and that won't help you at all. As far as a co-signer goes, well, it depends on what the income/debt ratio is, if her house payment eats up a lot of her income, she may not be of much help to you.

[pkloop]

I got turned down by sallie mae for my loan...called them back and told them to try again. If you convince them (badger the s out of the loan maker) you can pay you'll get a loan. Try it you'd be suprised how often that works..flight school loans, CC etc..

[MrSkyKingRon]

My Key story is a story of PERSISTENCE! I was denied twice maybe three times and relentlessly kept at them till I got the answers I wanted and the results I needed=APPROVED"now take your damn money and go away!" Not really but here are the highlights. I had spotty credit 5 years ago and beyond. Credit has been good in the last five. They gave me various denial reasons and one the things I did in the last 5 years and since the denials was to pay off everything that wasn't paid in full. Then your still gonna have the collections bitting you in the ass still for reasons such as " collection,90 days or more overdue within 2 years." Some of those I paid off and some where still from many years ago. But once I contacted all the four major reporting agencies they all reactivated the hunt for their money and in turn raised the red flag as being overdue, no matter how many years ago it was for how little. So through about of a year of paying and contacting the collection agency and key and back and ... It was a royal pain to get everybody in line and happy. But I never gave up and NEVER TOOK NO FOR ANSWER!. Needless to say 5 years and beyond I was so busy partying and getting high and being a up that I screwed my credit all up, and it was not worth it in hindsight. Anyway, it will take time and perserverance to get a yes.

There's more but it was so involved I would have trouble recounting all of the moves I made. But good advice from one other in this thread, work two or three jobs and save your money. It takes longer but it's much cheaper in the end. Since I can't roll back the hands of time, the loan was my evil way in. I've worked a second job for THREE YEARS now to pay for my private and to pay back all of my screw ups, and in Jan. that ends and I will be going to The Aviator. Then I'll end up CFIing and working a second job again but under curcumstances of my control and choosing. Good luck.

[MrSkyKingRon]

Oh one more thing. In your calls to Key for answers and questions, anytime you get someone on the line that says, sorry but because of _______ we can't get you the loan ask to speak to their boss. Keep working your way up. I did. And try to talk and reason with them on a "human" level. Be convincing. I was denied many times but as I kept getting sorry's I would ask to talk to someone else. Finally when good 'ol Hercules,was his name said no for the 5th time and put me through to his boss's boss, after waiting on hold for a bit Hercules said, " Ok, your approved." I just about died. Get the idea?

[JDMcFly]

Are you guys, who are getting denied or not, using co-signers?

I think finding a cosigner is going to be the roughest toughest part of loan hunting.

[MQAAord]

It's also a good idea to keep a close eye on your credit report. When my husband first started checking his (about 3 years ago) he found many discrepencies, including credit cards & accounts that were showing open and available, although those accounts had been closed for years. There were also two other items that were just plain wrong. After a year or so of fixing these problems, his credit report is now accurate. Check your credit report, and see for yourself what the lending institutions are seeing about you!

[Prospective_Pilot]

Listen to SteveC cause this guy has some good advice.

I couldn't agree more with him.....

What I don't understand is why people want something by all means they don't deserve, or haven't worked for and so freely are willing to go into debt just because they can get the money they need with the click of there fingers right then and there.. It's almost as if some people go into debt before thinking of other options..which there usually are..

If you don't have any other options and HAVE to go into debt at least try and minimize that debt and keep it as little as possible. In the long run you will have more money in your pocket.

Only thing I'd be willing to go into debt over is a house because you're either paying rent or paying off a home....makes more sense to pay off the home...

Just my friendly 2 cents worth.....

[bluelake]

agreed on the suggestion on checking your credit report, also on the one about being tenacious..

Remember, paying off a debt that you defaulted does not wipe away the fact that you DID default.. and this will be on your credit report for seven years.

I had relatively good luck with Sallie Mae.

[bluelake]

I also agree with SteveC.

I DID use loans (for only a portion of training) but this has had to go on top of my current student loans. I got a MS in non-aviation and then changed to this pursuit.

I dont regret the loans I took in college, and I dont regret my Sallie loan I took out last year to get through my Comm and CFI, but I will say that as a CFI, I always earn enough to pay for my basic expenses. Its the added loan payments I have to make that make me squirm at the thought of getting through this winter.

If you want any particular help, PM me. I spent a year managing my credit report so that it looked good and did the SLM loan...

[JDMcFly]

I think it's pretty much on a case-by-case basis. You can't say "don't get a loan", for each his own. What may have worked for you, may or may not work for others.

I personally do not want to wait until I am thirty years old to get into aviation. I don't want to spend the next 15 years as I have the last 15 just talking about what I'd like to do, and not doing it.

Sure, flying as you go with an FBO can work, but well be just as expensive (if not more so) than quicker routes (whether that route be through an FBO or not).

Would you suggest the same thing about College? I doubt it! I have to pay for college my self, that's a '0' in the parent financial support box. I can thank federal and state grants to help me pay for most of college, and any subsidized loans I would be using for college would be very small.

I can venture to say with great confidence that the loan money I would be taking out for actual flight training would be less than many are spending on college alone.

Anyways, what I'm trying to say is, with loans, I'm not going to be oweing any more than many university-goers will be oweing. I don't care. Will I try to save as much money as I can? Sure! I'd never get through college or flight training without them, though.

Some people don't mind taking 20-50 thousand out in loans. Debt is only a problem if you let it be. Yes, it will make life rougher, but it's life baby. I'd rather have something going on good in my life to go with that bad, than eating a pile of mud just dreaming of what could be.

Bad CREDIT will eat you alive.. Just don't let that happen (make the relatively measily payments of 40 dollars a month if you have to for a year), and you should be alright. I know what having bad credit can do to you, it's not pretty. I also know paying of student loans (college atleast) is one of the best things you can do for bad credit. You can be 200k in debt, but still have great credit. Good and/or great credit will make life much easier on you.

Note: I'm not advising anyone that taking out loans is the best thing to do, just that they can be a very useful tool if handled properly.

[PFactor]

I am currently working on my CFI and have paid for all my flight training out of pocket. Yes, it is slower going this way (2 1/2 yrs so far) but I could stop tommorow and not owe one dime to anyone.

[bluelake]

PFactor - based on your plan, you will only be ahead if you quit

Just kidding Heck, I ought to go work as a SLM or Key rep

I think the world would be a lot better off if they got rid of that phrase "line of credit". What it really is is a "line of debt."

[Lima_Charlie]

Have you gone through the appeal process?? I had to appeal my loan, and the rep that I spoke to gave me the specifics as to why my loan was denied the first time. Once I had the specifics, I was able to prove that the info was not accurate, and was able to get the loan to go through.

The other thing I would recommend is keeping track of the "helpful" Key reps that you talk to. I was able to find ONE that was pretty high up, and was able to give me better info that some of the "underlings". I am trying to remember her name.... It was an "Indian" woman.... hmmmm