Aircraft financing

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Blueangel

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Scott
Folks,

I have been researching the best way to finance a nice aircraft. Here is what I have found:

  • Cash is king if you can part with 100-200K plus another 50K for avgas, insurance, hangar and mx
  • Home equity loan is least expensive rates
  • Aircraft lenders want 15-20% down and loan 4-5% rates.

My question is what lenders have the best lowest aircraft rates? We know ownership is more expensive than renting but the intangible rewards make it worth it.

Scott
 
Bank of America ,would not be my first choice. Their interest rate is still a little on the high side.
 
Guy who bought my plane said Dorr was easy and painless. We breezed through escrow.

Not so much with my current lender. It was drug through the mud and I was starting to get very irritated. We closed but I was not happy. I did get the plane I wanted though, so I'm moving on.
 
I don't want to take away from the OP but it's line with financing.

How little do banks finance for aircraft. How long are the terms of these low financed aircraft. For instance, a 152 for time building. Or in the range of 20-40k

Curious
 
Is it possible to get a loan with no money down? I ask because the last aircraft loan I did, I managed to pull that off, but I don't know if such a thing exists now-a-days...
 
I am working with Joy from NAFCO. Far and above the most helpful lender of the many I contacted.
 
Well so far the aircraft lenders I've heard back from loan at 4.5-5% and want 15-20% down for loans over 100K.
 
If you are in good with your locals they will usually do 80% value and 5% on a balloon note at 10 yr.
 
Blueangel said:
Folks,

I have been researching the best way to finance a nice aircraft. Here is what I have found:

  • Cash is king if you can part with 100-200K plus another 50K for avgas, insurance, hangar and mx
  • Home equity loan is least expensive rates
  • Aircraft lenders want 15-20% down and loan 4-5% rates.

My question is what lenders have the best lowest aircraft rates? We know ownership is more expensive than renting but the intangible rewards make it worth it.

Scott
Click to expand...

The best way to go if you can...:):):)
 
AOPA hooked me up with a small bank in Oklahoma that was the best rate I found. 15-20% down for a $80k plane which I felt if I can't save enough to do that I probably need to reconsider ownership. If I was looking at a more expensive plane then I would understand that would be quite a lot. Lots of terms depending on the lender but most had 5,10,15 year terms. I had a couple give 20 year but for loan amounts much more than I needed. So many if AOPA member use them as that is what those dues pay for (that and sending out a bazillion mailers asking for more money).
 
Looked at home equity loan and they are actually higher rates than what aircraft lenders offer right now. I will check the AOPA finance options. Planes I want to buy are 100-150K so need a loan for that.
 
Over $75k note, 20% down excellent credit got me 20 years at 4.65%.
 
Red River State Bank in MN. Underwriters are pilots and the small-town feel is definitely there. Bought my first plane through them last year, and the only condition was 20% down vs the standard 15% on that year range because it was a Socata and they didn't do many of them.

Lori Moen was my loan agent- excellent experience and I've sent several people to them since.

airloan.com
 
LightStream is super easy. Up to 100K I think.
 
From reading this thread it looks like financing consists of:

20-35% down
4-5% interest rate.

What varies is the term since someone mentioned a 10 year balloon and another a 20 year term.

Considering the cost of a plane can reach the equivalent of the cost of the house, is a 20 year term the norm?

On a car the rule of thumb is nothing longer than 4 years. Is it safe to presume that's out the window for planes?

I just can't imagine paying for a hobby for 20 years.
 
50k a year for hangar, MX and fuel?

Thanks a chunk of change

What type of aircraft is this, how many hours you flying a year?
 
We used Dorr. Great rate and we breezed through. Easier than getting a home loan.
 
I ended up going with Lightstream. The funding was crazy simple. I think they want you to have a chunk of change in savings. I applied with excellent credit and next to nothing in my savings account and got denied. I reapplied with good credit and money in my savings account and was instantly approved. They also don't require you to register the aircraft with them as a lienholder.

Only "problem" is that you're limited to a 7 year term instead of a 15-20 year term with them.
 
Caramon13 said:
Is it possible to get a loan with no money down? I ask because the last aircraft loan I did, I managed to pull that off, but I don't know if such a thing exists now-a-days...
Click to expand...

Yes, some sellers are motivated enough to offer financing. I have seen that a few times ask if the seller is willing to finance you or offer down payment assistance.

James331 said:
50k a year for hangar, MX and fuel?

Thanks a chunk of change

What type of aircraft is this, how many hours you flying a year?
Click to expand...

Sounds like a King Air and above to me :)
 
I'm considering buying an inexpensive two-seater. For example: there's a Champ for sale near me for a great price. Nice fabric, great interior, bigger engine, full electric, transponder, comms, etc. I'd probably finance it just because interest rates are low enough to justify it, and buying stuff with other people's money is always a win in my book. You just have to find equitable terms, and that's always *ALWAYS* negotiable. With 25% down I'd have 60 payments in the $275 range. Can't beat it. I keep my money in the bank and pay a little interest over 5 yrs. My money is still available for repairs, annuals, shelter and gas.
 
Lachlan said:
I'm considering buying an inexpensive two-seater. For example: there's a Champ for sale near me for a great price. Nice fabric, great interior, bigger engine, full electric, transponder, comms, etc. I'd probably finance it just because interest rates are low enough to justify it, and buying stuff with other people's money is always a win in my book. You just have to find equitable terms, and that's always *ALWAYS* negotiable. With 25% down I'd have 60 payments in the $275 range. Can't beat it. I keep my money in the bank and pay a little interest over 5 yrs. My money is still available for repairs, annuals, shelter and gas.
Click to expand...

That's about where I want to go for an aircraft. Of course I can't quite buy a fabric plane since all I can really afford to do is tie it down, so it'd have to be metal.

My problem is not the ongoing costs, it's the initial investment. Working on my CFI-A/I as able too to supplement income a bit.
 
Blueangel said:
Folks,

I have been researching the best way to finance a nice aircraft. Here is what I have found:

  • Cash is king if you can part with 100-200K plus another 50K for avgas, insurance, hangar and mx
  • Home equity loan is least expensive rates
  • Aircraft lenders want 15-20% down and loan 4-5% rates.

My question is what lenders have the best lowest aircraft rates? We know ownership is more expensive than renting but the intangible rewards make it worth it.

Scott
Click to expand...
Do you have a savings account? Is your car financed. Do you rent or own your home? These should be considered before getting involved in an airplane, probably an old one that would eventually cost a lot to maintain. Just a reality check which is often not welcome. Oh and don't forget an emergency fund to live on if you suddenly lose your job.
 
I have cash and no debt. Car paid off years ago. Renting as it is cheaper than a mortgage for overpriced real estate in San Diego.
Probably will pay cash for plane in future as rates are still higher than I'd like.
 
Shoot, move anywhere and get out of the money sucking city and state. Obviously this is just my opinion, but Cali is just outright insane on taxing, regulation, and thinking they deserve to be directly involved in every lifestyle decision their citizens make. The only places in the whole nation I can think of that makes Cali seem like a nice place to live are New York and DC.

I guess beaches and tropical weather are just not enough of an upside for all the downsides I see in Cali.
 
GDMCC said:
LightStream is super easy. Up to 100K I think.
Click to expand...

I second this. We got ours unsecured for around 4%, then decided we wanted a geothermal system installed and got an even bigger loan for less
 
Blindrage said:
Shoot, move anywhere and get out of the money sucking city and state. Obviously this is just my opinion, but Cali is just outright insane on taxing, regulation, and thinking they deserve to be directly involved in every lifestyle decision their citizens make. The only places in the whole nation I can think of that makes Cali seem like a nice place to live are New York and DC.

I guess beaches and tropical weather are just not enough of an upside for all the downsides I see in Cali.
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CA doesn't even pretend to be anything other than socialist. The department of taxation is officially named the Bureau of Equalization.
 
Blindrage said:
Shoot, move anywhere and get out of the money sucking city and state. Obviously this is just my opinion, but Cali is just outright insane on taxing, regulation, and thinking they deserve to be directly involved in every lifestyle decision their citizens make.
Click to expand...

There are homes in California that are about 20 feet from the Nevada state line. I have no idea why someone would not move 20 feet away to safe a mountain of tax and regulation.
 
DesertNomad said:
There are homes in California that are about 20 feet from the Nevada state line. I have no idea why someone would not move 20 feet away to safe a mountain of tax and regulation.
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wouldn't that only save you on property tax?
 
I wasn't expecting all the paper work needed if you own your own business. Might be worse than buying a house
 
muddy00 said:
I wasn't expecting all the paper work needed if you own your own business. Might be worse than buying a house
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It's about the same.

Sucks to have a bank you have been with for 20 years treat you like the TSA dealing with someone with a name similar to another on the no-fly list.
 
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