Aircraft Loan Calculator

Free Aircraft Loan Calculator

Are you an aviation enthusiast looking to buy your first plane or a professional pilot seeking to upgrade to a newer aircraft model? Financing such a substantial purchase requires careful planning and budgeting. 

That’s where Counting Tools‘s free aircraft loan calculator comes into play, providing a comprehensive tool to estimate your monthly payments, total interest costs, and overall loan affordability.

How the Aircraft Loan Calculator Works

The aircraft loan calculator is designed to be user-friendly and comprehensive, allowing you to input various details about your aircraft purchase and financing preferences. Here’s how it works:

  1. Aircraft Type: You can select from various aircraft types, including Experimental, Light Sport, Piston Single, Piston Twin, Turboprop and Turbine, Helicopter, and Warbirds and Antiques.
  2. Purchase Price ($): Enter the total purchase price of the aircraft you wish to finance.
  3. Down Payment (min. 15%) ($): Specify the down payment amount you plan to make, with a minimum requirement of 15% of the purchase price.
  4. Term (max. 20 years): Choose the loan term, with a maximum duration of 20 years.
  5. Interest Rate Low (%): Input the lower end of the interest rate range you expect to pay on the loan.
  6. Interest Rate High (%): Input the higher end of the interest rate range you expect to pay on the loan.

After entering these details, you can click the “Calculate” button to obtain the following results:

Loan Details

  • Plane Type: The selected aircraft type.
  • Purchase Price ($): The total purchase price of the aircraft.
  • Down Payment ($) and Percentage: The down payment amount and its percentage of the purchase price.
  • Loan Amount ($): The amount to be financed after deducting the down payment from the purchase price.
  • Term (years): The chosen loan term in years.
  • Interest Rate (%): The range of interest rates entered.
  • Principal ($): The loan amount.

Monthly Payments by Term

This section displays the estimated monthly payments for the given loan amount and interest rate range, broken down by three different loan term options: 20 years, 15 years, and 10 years.

The calculator also provides options to copy the results, export them to various file formats (XLSX, XLS, CSV, TXT), and potentially perform other actions based on the available buttons or links.

By providing these inputs and receiving the corresponding loan details and monthly payment estimates, you can evaluate different financing scenarios and make informed decisions about your aircraft purchase.

Why Use an Aircraft Loan Calculator?

Buying an aircraft is a major investment, and it’s crucial to understand the financial commitments involved before making such a significant purchase. An aircraft loan calculator offers several benefits:

Estimated Monthly Payments

One of the primary advantages of using an aircraft loan calculator is its ability to estimate your monthly loan payments accurately. By factoring in the loan amount, interest rate, and loan term, the calculator can provide you with a realistic expectation of your monthly financial obligations.

Total Interest Paid

In addition to monthly payments, the calculator also reveals the total amount of interest you’ll pay over the life of the loan. This information is crucial when comparing loan offers from different lenders or evaluating the overall cost of financing your aircraft purchase.

Loan Affordability Assessment

Perhaps the most significant benefit of an aircraft loan calculator is its ability to help you assess the affordability of the loan. By adjusting variables such as the down payment amount or loan term, you can explore different financing scenarios and find a payment plan that aligns with your budget and financial goals.

Understanding the Loan Amortization Schedule

In addition to the key results mentioned above, the aircraft loan calculator may also provide a visual representation of the loan amortization schedule. 

This schedule breaks down the monthly payments into principal and interest portions over the loan term, allowing you to see how the balance of your loan decreases with each payment made.

The amortization schedule is particularly useful for understanding the long-term implications of your loan and making informed decisions about potential refinancing or early payoff options.

Eligibility for Aircraft Loans

Most lenders have certain eligibility criteria for approving aircraft loans. Typical requirements may include:

  • Good credit score (usually 700+)
  • Sufficient income to cover loan payments
  • Down payment of at least 15-20% of the purchase price
  • Relevant aviation experience/credentials for operating the aircraft
  • Acceptable debt-to-income ratio

The specific criteria can vary by lender, so it’s important to check their guidelines.

Types of Aircraft Loans

There are several financing options available for aircraft purchases:

Secured Loans: These use the aircraft itself as collateral, potentially offering lower interest rates but putting the aircraft at risk if you default.

Unsecured Loans: These do not require collateral but may have higher interest rates and stricter eligibility requirements.

Specialized Aviation Financing: Some lenders specialize in aviation financing and may offer tailored loan products for aircraft purchases.

Manufacturer Financing: Major aircraft manufacturers sometimes provide financing options or partner with lenders.

Lender Options

When seeking an aircraft loan, you can explore various lender options:

Banks and Credit Unions: Many traditional financial institutions offer aircraft loans alongside other lending products.

Specialized Aviation Lenders: Companies that focus specifically on financing aircraft purchases may have more expertise and competitive rates.

Online Lenders: Some online lending platforms now offer aircraft financing options with potentially faster approval processes.

Loan Application Process

The typical loan application process for an aircraft purchase involves:

  1. Gathering documentation (proof of income, credit report, details on the aircraft, etc.)
  2. Submitting the loan application and down payment details
  3. The lender conducting a credit check and appraising the aircraft
  4. Loan approval/denial decision
  5. Closing the loan if approved

The process can take several weeks from start to finish.

Loan Repayment Considerations

When selecting a loan term, consider factors like:

  • Shorter terms mean higher monthly payments but less total interest paid
  • Longer terms are more affordable monthly but accrue more interest over time
  • Some loans have early payoff penalties, so factor those in
  • You may be able to refinance later at a better rate

Tips for Using the Aircraft Loan Calculator Effectively

To make the most out of the aircraft loan calculator, consider the following tips:

  • Play with the numbers: Experiment with different loan terms, interest rates, and down payment amounts to find the most suitable financing option for your budget and circumstances.
  • Compare loan offers: Use the calculator to compare multiple loan offers from different lenders, taking into account not only the interest rates but also any additional fees or charges.
  • Factor in additional costs: Remember that the loan calculator only considers the aircraft’s purchase price. Be sure to account for additional expenses such as insurance, maintenance, hangar fees, fuel costs, and any applicable taxes when budgeting for your aircraft ownership.
  • Consider future plans: If you plan to use the aircraft for business purposes or rent it out, factor in potential income streams that could offset your loan payments.
  • Seek professional advice: While the aircraft loan calculator is a valuable tool, it’s always recommended to consult with financial advisors or aviation professionals for personalized guidance on financing your aircraft purchase.

Loan Calculator Limitations

It’s important to note that loan calculators provide estimates based on the inputs provided. Limitations may include:

  • Not accounting for loan fees, taxes, or other additional costs
  • Assuming fixed interest rates when actual rates could be variable
  • Using generalized assumptions about loan terms or down payments

Always verify final loan details and costs with your lender. The calculator is a tool for comparison, not a final binding quote.

Example of using the Aircraft Loan Calculator:

Scenario: Sarah is a private pilot looking to purchase her first aircraft, a 1976 Cessna 172M Skyhawk, for personal use. The asking price is $50,000.

Using the Aircraft Loan Calculator, Sarah inputs the following information:

Aircraft Type: Piston Single Purchase Price ($): 50,000 Down Payment (min. 15%) ($): 10,000 (20% down payment) Term (max. 20 years): 15 years Interest Rate Low (%): 5.5% Interest Rate High (%): 7%

After clicking “Calculate”, the calculator provides these results:

Loan Details: Plane Type: Piston Single Purchase Price ($): 50,000 Down Payment ($) and Percentage: 10,000 (20%) Loan Amount ($): 40,000 Term (years): 15 Interest Rate (%): 5.5 – 7

Principal ($): 40,000

Monthly Payments by Term: 20 years: $293 – $322 15 years: $344 – $376 10 years: $449 – $487

Sarah reviews the monthly payment estimates for the different loan term options. While the 20-year term has the lowest monthly payment, she decides that the 15-year term at $344 – $376 per month is affordable for her budget and will minimize the total interest paid over the life of the loan.

She can now use these calculator results to compare offers from different lenders and make an informed decision on financing the purchase of her first aircraft within her desired budget and timeline.

The aircraft loan calculator allows Sarah to input the specific details of her aircraft purchase, explore various financing scenarios, and estimate the costs associated with each option before committing to a loan.