Are you curious about what shapes your aircraft loan rates? Whether you’re considering investing in a private jet or a small airplane, understanding how private aircraft loan interest rates are determined can save you a lot of stress (and money!). So, stay with us as we break down everything you need to know.
The Factors That Impact Aircraft Loan Interest Rates
Several elements influence your private aircraft loan interest rates. Below, we’ll explore key factors so you’ll know what lenders look for when determining your rate.
Your Credit Score Matters
Think of your credit score as your financial report card. A strong credit score signals to a lender that you’re reliable. You’ll likely qualify for lower aircraft loan rates if your credit score is high. A lower score, however, could mean higher rates as lenders see more risk in lending to you.
Loan Amount and Duration
The size of your loan and how long you plan to take to repay it both play major roles. Smaller loans or shorter terms often lead to better rates because lenders take less risk.
Larger loans or longer terms may result in higher private aircraft loan interest, so consider your loan terms carefully.
The Type of Aircraft
There’s a big difference in risk between financing a brand-new jet and an older, specialized plane. Newer aircraft often qualify for the best aircraft financing rates. At the same time, older or less common models might have higher rates.
Down Payments Make a Difference
How much you put down upfront matters. A larger down payment shows your commitment and lowers the lender’s risk. This can lead to lower aircraft loan rates, so it’s worth saving up for a substantial down payment if possible.
Take in Consideration the Market Conditions
Economic factors, like interest rates set by the Federal Reserve, play a big part, too. When market interest rates rise, so do private aircraft loan interest rates.
The same is true in reverse, so monitoring the economy can help you time your finances wisely.
Find the Aircraft Financing You Need Today
Now that you know what determines your private aircraft loan interest, you’re one step closer to securing the best deal. However, by working with an experienced lender like AirFleet Capital, you can avoid costly surprises and find the best financing solution for your aircraft. So, contact us today.