Aircraft loans

Can You get a 20 year note on a $40K Plae

  • Yes

    Votes: 8 27.6%

  • No

    Votes: 21 72.4%
  • Total voters
    29
Using your house as collateral anything is possible.

But you would be making a dumb decision to finance your toys with the place your family lives.
 
pfarber said:
Using your house as collateral anything is possible.

But you would be making a dumb decision to finance your toys with the place your family lives.
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All depends if you have other assets or just want to have cash available for other things. I used a HeLoC that was at 2.25% fixed. Where else are you getting a rate like that?
 
pfarber said:
Using your house as collateral anything is possible.

But you would be making a dumb decision to finance your toys with the place your family lives.
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Why point out that using a house as collateral is possible and then say it's dumb?

How do you know he has family?

Without knowing anything about his situation, how can you say anything about it is dumb?
 
Good question, Keith, but I do not know the answer. Some lenders hesitate to loan a relatively small amount on that long a note. I think you could probably get it on 10 years. My suggestion is to check with AOPA if/when you get serious.

Some folks say it is dumb to finance a "toy," but when somebody poses the question of which airplane, they start saying something like "my airplane is a traveling machine" -- they don't say it is a toy. Personally, I don't think it is any dumber to finance an airplane than it is a car, and a lot of folks do that.
 
Most lenders require a financed amount greater than 50k for a 20 year note with 20-30% down. That is financed amount, not purchase price. Example, purchase $62,500 with $12,500 down for 20 years. 40k would be 10 to 15 years term. Less than 25k would be 5 years.
 
A 40k 20 year loan at 5% is going to cost you $280 a month and you’ll end up paying $25,000 in interest, so that 40k plane is costing you $65k. Much better to find a partner instead of a loan. If you can only afford $280 a month for the plane, a surprise mechanical issue is going to put you in an unsellable plane with an upside down loan.

if that happens 10 years from now, you’d still owe $27k on the plane.
 
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Now, you’re missing a lot in your question. If you want a loan for 40k with a $160k cash down payment on a $200,000 aircraft, that’s a completely different situation, but I’m assuming if that were true, you wouldn’t be asking about a 20 year loan.

if you want a loan with low payments to finance a quick turnover that you’re confident you’d only pay a couple months payment, then that makes a little sense, although the risks in this market are high, it might be worth it in this market.
 
donjohnston said:
Why point out that using a house as collateral is possible and then say it's dumb?

How do you know he has family?

Without knowing anything about his situation, how can you say anything about it is dumb?
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Is this a serious question? You honestly can't see how risky it us to use your house as collateral for a toy?

Do you have lifetime employment? What about an injury or illness?

Do as you like but im pretty sure most people don't get rich buying toys they cannot afford.
 
Let's see... When I bought my 182RG, the loan was secured by the aircraft. I think the interest rate was 6%. After a year, I used a HELOC at 1% below prime. As I recall, at one point I was paying somewhere around 2%.

So yeah, I'm incredibly stupid.
 
E="donjohnston, post: 3231175, member: 16402"]Let's see... When I bought my 182RG, the loan was secured by the aircraft. I think the interest rate was 6%. After a year, I used a HELOC at 1% below prime. As I recall, at one point I was paying somewhere around 2%.

So yeah, I'm incredibly stupid.[/QUOTE]

Well, yes, you are. You are talking about rates, which i never mentioned. You completely ignored risk, which i explicitly mentioned.

Job loss is the number one reason for foreclosures. Banks swoop in after 90 days.

So again the risk was completely ignored which has been my point all along.
 
pfarber said:
donjohnston said:
Let's see... When I bought my 182RG, the loan was secured by the aircraft. I think the interest rate was 6%. After a year, I used a HELOC at 1% below prime. As I recall, at one point I was paying somewhere around 2%.

So yeah, I'm incredibly stupid.
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Well, yes, you are. You are talking about rates, which i never mentioned. You completely ignored risk, which i explicitly mentioned.

Job loss is the number one reason for foreclosures. Banks swoop in after 90 days.

So again the risk was completely ignored which has been my point all along.
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Scary risk. If you lost your job, you'd have to sell your airplane. Waah!
 
Borrowing money during a high inflation rate environment is a smart thing.....paying it back with inflated dollars works for me. Just don't lose your job.
 
You can't get back life years at some point you be reduced to sitting around scrolling though online forums because your too old, or unhealthy to do much of anything else. I have a friend who never did anything always worried about money he saved up lots of money retired 3 years later had a stroke and now in a nursing home all that money going to pay $6000 a month not the life I want. Rather live in a cheaper home live with less money and enjoy life before it's all over with. I'm not saying go broke don't have to have new cars, or 3500SQ ft home. Most people spend 35k on a car trade it for 12k when the drivers seat wears out yet they don't think that is risky.

I regret passing up aviation when I was in my 20's because I was told the loans would be too much dumbest thing I ever did. Now I'm older can't get past the medical have a wife who not supportive of the idea those 2 things I would not have to deal with it back then.

Take whatever loan you can get follow your dreams in life once the day is done its done.
 
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Well, you can certainly dig yourself a hole if you go too far, but there's not a darn thing wrong with responsible use of debt. I didn't think I could afford it when I got in but now I regret not taking the plunge sooner. I've pretty much given up all my other hobbies, but I'm not missing them, and that's more about time than it is money. I can do a lot of those hobbies when I'm not able to fly anymore.
 
I just got a 10 year note from my credit union at 3.9% for $60K. No collateral needed. They asked what I was going to do with it and I told them refinance my airplane that is at 5.25% for 20 years. Payment went up $200/ month but I am saving $31,000 in interest.
 
Partners are great with the right people. Life’s busy and even just arranging for shops to do work sometimes it’s a multi people job as I have found out. Say you need to fly plane to a shop, with partners there’s a pool of people to come drive you back. Beats asking the wife and getting the stink eye.

Spreading the cost is also beneficial beyond just the plane. Alone I’d have gone with a tie down. With the lot is us we have one of the nicest hangar. And sharing also limits the pucker factor when something inevitably break. No one’s losing sleep over the radio needing replacement.
 
Im 76 and got a 15 year loan on just under 40K i was looking for a 10 year loan as long as interest rates are low the banks will give you money.
 
kell490 said:
You can't get back life years at some point you be reduced to sitting around scrolling though online forums because your too old, or unhealthy to do much of anything else. I have a friend who never did anything always worried about money he saved up lots of money retired 3 years later had a stroke and now in a nursing home all that money going to pay $6000 a month not the life I want. Rather live in a cheaper home live with less money and enjoy life before it's all over with. I'm not saying go broke don't have to have new cars, or 3500SQ ft home. Most people spend 35k on a car trade it for 12k when the drivers seat wears out yet they don't think that is risky.

I regret passing up aviation when I was in my 20's because I was told the loans would be too much dumbest thing I ever did. Now I'm older can't get past the medical have a wife who not supportive of the idea those 2 things I would not have to deal with it back then.

Take whatever loan you can get follow your dreams in life once the day is done its done.
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There is a balance, but basically I agree. My former FIL did like your friend. Did little in the way of fun, but saved up for when he retired and he would do all these things. And while he did not end up in a nursing home (he could afford in home care) he didn't get to do all those things.

So I strike a balance. Save for the future, but still have fun.
 
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