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What Determines the Length of a Loan

NAFA member, Adam Meredith, President of AOPA Aviation Finance Company, answers your aircraft finance questions.

Question: What determines the length of loan say between 15 and 20 years. I’m looking at a 1997 aircraft to finance 45k. What term might I expect to get?

Answer: Generally speaking the amount financed,  usage and age are what limits length of term. In this case age is not the issue, however, loan amount at $45k would likely limit you to 15 years. The reason being, after 3 years on this amortization schedule you will have only paid the loan by less than $4k. This doesn’t leave much room for surprise expenses like an engine overhaul and therefore benefits neither the owner nor the lender.

Question: Can I get a loan to finish off a project aircraft? I would need less than 20k to purchase the avionics. Everything else (engine and Airframe) are done. I could get a conditional Airworthiness inspection if needed. Thanks.

Answer: Thanks for the question. It really would depend on the specific aircraft and how much work (time) it will take to get it airworthy. We’d be happy to discuss further, please contact us directly so we can review your specific situation.

Have questions for Adam? He is happy to answer them. Submit your questions here. 

This article was originally published by AOPA Aviation Finance Company on April 30, 2021.