When you’re trying to get aircraft loans, there’s a lot of information you (or the lender) need to collect in order to provide a complete overview of your possibilities and needs. However, during the process of getting a loan, some things can affect its terms.
Want to know 5 factors that have an impact on your aircraft financing loan terms? Keep reading.
5 Factors That Can Affect Your Aircraft Financing Loan Terms
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Loan Amount
One of the most important factors that lenders consider is how much they’re willing to loan. The decision is based on a variety of things, such as the estimated value of the plane, your credit score and history, and the amount of money you’re able to put as the down payment.
If you want to get an idea of what kind of terms you might be able to get, try contacting a few lenders and getting quotes. This will give you a ballpark idea of what’s available to you and help you start negotiations.
You have to keep in mind that the lower the loan is, the higher the down payment. If the loan is higher, your interest rate will be lower.
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Down Payment
A down payment is necessary when financing an aircraft; it usually ranges between 15% to 20%. You may be able to put down a 10% down payment if you have excellent credit. In aviation, there are no zero-down payments.
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Age, Make & Model
The aircraft’s age, make, and model also plays a role in financing. Generally speaking, lenders are more likely to finance newer planes with low flight hours. The reason for this is that there’s less of a chance something will go wrong with them, and they’re easier to resell if you need to.
Lenders are also more likely to finance a popular plane model over one that is less common; this is because there’s a higher chance someone will want to buy it from you if you need to sell it in the future.
The age of the aircraft also matters – planes that are too old may not be financed at all. Keeping this in mind is a must whenever you’re looking for a loan and trying to decide which plane to buy.
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Usage
How you plan to use the aircraft also bears the loan terms. Business plans generally have better terms than those used for personal reasons; lenders see them as being more likely to be repaid because of the wear and tear. You’ll probably get fewer terms if you want an aircraft for personal usage.
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History
Your credit score and history are also considered when it comes to aircraft financing. A good credit score will help you get a lower interest rate, while a bad one could mean you won’t be approved for a loan at all. Your credit score is based on your payment history, how much debt you currently have, and how much debt you’ve had in the past.
These are just some of the things that lenders consider regarding aircraft financing. Keep these factors in mind as you’re looking for a loan and trying to decide which plane is right for you.
Get Great Aircraft Deals With AirFleet Capital
AirFleet Capital is an aircraft financing company in the United States. We’ve been in the industry for more than 20 years. When it comes to aircraft lending, we’re the greatest option in the market. With over 8,600 aircraft financed and counting, we’re interested in working with you.
Whether you’re looking for a Piston, Turboprop, Jet, or Helicopter, we can get you a loan that adjusts to your possibilities and also meets your needs. We give you wings; you allow us to keep promoting General Aviation in the country.
