Airplane Loan Requirement

sgkramer

sgkramer

Filing Flight Plan
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Jun 14, 2018
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Sam
In the past week I was approved for a loan from Banterra for a new Cessna Skylane. One requirement is that in the 90 days preceding the loan, I must get 5 hrs of dual instruction. As I indicated in my loan application, I hold a ASEL Commercial certificate, IFR rating, 2,200+ hrs, and am BFR, medical, and instrument current. I don’t want to go out and spend over $1,000 (closer to $1.5K) on 5 hrs of airplane rental and an instructor. I fly a minimum of three flights a year with a CFII in the FAA WINGS program. I whole-heartedly agree about staying proficient as well as current, but I think this requirement for the loan is unnecessary.

Is this 5 hrs of training within 90 days of the loan a common practice among lenders.
 
sgkramer said:
In the past week I was approved for a loan from Banterra for a new Cessna Skylane. One requirement is that in the 90 days preceding the loan, I must get 5 hrs of dual instruction. As I indicated in my loan application, I hold a ASEL Commercial certificate, IFR rating, 2,200+ hrs, and am BFR, medical, and instrument current. I don’t want to go out and spend over $1,000 (closer to $1.5K) on 5 hrs of airplane rental and an instructor. I fly a minimum of three flights a year with a CFII in the FAA WINGS program. I whole-heartedly agree about staying proficient as well as current, but I think this requirement for the loan is unnecessary.

Is this 5 hrs of training within 90 days of the loan a common practice among lenders.
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I dunno if it's common practice or not. Do you have C182 time? If so, how much, how recent. Maybe you could negotiate with them. Depending on how much the down payment is and how much it's insured for, it could be a win for them if you crash it the first day. You could try playing that card.:fingerwag:
 
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This is what I dislike so much about forums. My question was if the requirement was a common practice. I get one smart a$$ remark, a question, a recommendation, and a comment. No one answered my question.
 
BTW, about 2/3 of my time are in 182s and 206s, but the application doesn’t ask about that, it just makes the 5 hr requirement.

No responses needed or desired.
 
No aircraft loan I’ve personally had required any training whatsoever. A good friend of mine has owned close to a dozen new aircraft and I don’t ever recall him mentioning any training requirements to secure any of the loans.

What would this company do if the purchaser was not a certificated pilot?
 
DaleB said:
New here, huh?
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3i71v6.jpg
 
sgkramer said:
This is what I dislike so much about forums. My question was if the requirement was a common practice. I get one smart a$$ remark, a question, a recommendation, and a comment. No one answered my question.
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Hey. I kinda did. I said "I dunno"
 
sgkramer said:
This is what I dislike so much about forums. My question was if the requirement was a common practice. I get one smart a$$ remark, a question, a recommendation, and a comment. No one answered my question.
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YES, it is common practice for lenders to impose this sort of requirement upon borrowers who, rather than posting a simple question to an online forum, instead include an assortment of extraneous information and a whining complaint, and then don't expect forum members to comment upon the entire post.

Frankly, I think the lender should raise the interest rate for such buyers.

Now, you have an answer to your question. Feel better?
 
To answer the question - that seems more like an insurance requirement versus a finance requirement. I do think that is strange.

Also - thank you for your service.
 
Half Fast said:
YES, it is common practice for lenders to impose this sort of requirement upon borrowers who, rather than posting a simple question to an online forum, instead include an assortment of extraneous information and a whining complaint, and then don't expect forum members to comment upon the entire post.

Frankly, I think the lender should raise the interest rate for such buyers.

Now, you have an answer to your question. Feel better?
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I intended to post a response to the OP, but I can’t top that…:D
 
Is it time 8n.the same plane or do you just need 5 hours dual in anything? Seems you could do it for much less byfinding a cheap rental. Around here there is a cubthat rents for 90 an hour wet and the instructor is 50. That would only be $700 for 5 hours.
 
Greg Bockelman said:
Smart *** comments aren’t really helpful and add fuel to the fire for those who don’t think POA is a very friendly place.
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Who said we aren’t friendly?!? We’re getting brick for heavens sake. Although now I think we should make it say “POA - not a very friendly place” or “smartass comments aren’t really helpful.”
 
sgkramer said:
Is this 5 hrs of training within 90 days of the loan a common practice among lenders.
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I've only had one aircraft loan. There were no currency or training requirements by the lender. But there was for insurance obviously.
 
sgkramer said:
This is what I dislike so much about forums. My question was if the requirement was a common practice. I get one smart a$$ remark, a question, a recommendation, and a comment. No one answered my question.
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You posted on an internet DISCUSSION forum. You're getting a DISCUSSION which seems to be going pretty much the exact same way it would have if you asked the same question in person to a group of pilots at the FBO. Not sure why you'd expect any different, especially after only 5 responses.
 
sgkramer said:
In the past week I was approved for a loan from Banterra for a new Cessna Skylane. One requirement is that in the 90 days preceding the loan, I must get 5 hrs of dual instruction. As I indicated in my loan application, I hold a ASEL Commercial certificate, IFR rating, 2,200+ hrs, and am BFR, medical, and instrument current. I don’t want to go out and spend over $1,000 (closer to $1.5K) on 5 hrs of airplane rental and an instructor. I fly a minimum of three flights a year with a CFII in the FAA WINGS program. I whole-heartedly agree about staying proficient as well as current, but I think this requirement for the loan is unnecessary.

Is this 5 hrs of training within 90 days of the loan a common practice among lenders.
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When I was considering a loan, part of the consideration was the requirements the lender placed on the agreement. When I didn’t like their requirements, I didn’t use their services. Is that too easy or what?

not as much fun as bitching to strangers about them though.
 
I have no idea about lenders requirements, but just came here to say:

GO AIR FORCE
BEAT ARMY

Sluggo 63
USAFA 91
 
sgkramer said:
This is what I dislike so much about forums. My question was if the requirement was a common practice. I get one smart a$$ remark, a question, a recommendation, and a comment. No one answered my question.
Click to expand...
Typically it's an insurance requirement but not a loan requirement unless you are going into a complex or something where you have little time.
 
I had like 10 hours HP when I bought my 182. Insurance didn’t require squat. Still paid a CFI to fly most of the way home with me. Paid cash.
 
I think DaleB nailed it with tell the dealer you'll buy if they throw in 5hrs dual.

Welcome to POA.
 
SGK, that’s a mini” requirement as far as insurers go.

When I transitioned to the piston twin they demanded 25 hr, never mind the 3400 hrs PIC in the E188.

…..turns out, looking back, I wasn’t routinely “good” at the new bird until the ?50th hour or so…..
 
The hour requirement is usually an insurance requirement,the lender usually requires that their name is put on the insurance form. The lender also requires you carry enough insurance to cover the amount of the loan.
 
We must remember that a lender is in the money rental business, he is a VENDOR just like your garbage service or uniform company, Banks and Insurance companies spend a lot of effort trying to put themselves on a platform so we think that they are like God. They are merely vendors.

Years ago I sent my bank a registered letter informing them that they had been placed on "vendor probation" and if the service did not improve they would be terminated. Later when I started buying CDs from the bank I insisted that the banker Co-sign for the bank.

Life is a barrel of fun.

Ken
 
In my experience only an insurance requirement. Buying a new Skylane includes some training doesn't it?

Maybe insurance will agree that you simply get the training immediately upon taking possession of the plane... And if not provided by Cessna then maybe they agree if you immediately hire a CFI for the training immediately upon taking possession of the plane. That would lower you cost as well....
 
Years ago, I bought a motorcycle with a loan. After making a payment or two, the lender sent me a letter saying that they had not yet received verification that I had attended a motorcycle safety school, and that they required it of all motorcycle loans. I just simply told them I wasn't doing it. They went away...
I mean, what are they going to do if you refuse to get the training?
 
Since I am about 10 years away from that biz, I can't say whether or not it is common. But it does not surprise me that a bank which concentrates on GA as a market would have its own underwriting standards.

For a bank, repossession rights and insurance are backups, not a primary source of repayment.
 
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