If you intend to buy an airplane soon, you’ll have to consider a few different things before jumping in headfirst into this amazing world.
Honestly, one of your biggest concerns is going to be buying the airplane itself and determining the best way to pay for it.
Unless you are incredibly rich, you will most likely look into airplane financing to pay for this purchase. The good thing is that airplane loans are very similar to mortgage loans and car loans. But at the same time, you also need to understand the airplane financing process.
That’s what we’re going to tell you about today.
Picking Your Lender
First and foremost, if you intend to secure financing for your aircraft, researching various lenders who offer these loans is definitely the best first step. In fact, you can get airplane loans from a number of different places including private lenders, traditional banks, and even professional pilot associations.
Each one of these lenders will have different financing requirements, down payment requirements, and loan term lengths. So it’s up to you to determine which lender is providing the best options based on your own personal needs.
On the other hand, lenders are also going to have certain guidelines that need to be followed based on the financing now offered for certain airplane types.
The age of the aircraft and your geographic location can also have an effect on your financing options.
Ultimately, research is in order to get the best possible financing deal from the best lender. So use the options that we have shared with you today to begin researching various lenders offering airplane financing.
Aircraft Loan Qualifications
Some people are going to have an easy time qualifying for an aircraft loan. And it’s not going to be so easy for others.
As you can probably guess, each lender is going to have specific qualifications that need to be met. And one lender might have very different qualifications than another.
That’s why you really have to broaden your horizons and look into as many aircraft lenders as possible so that you can definitely keep your options open.
For starters, to qualify for airplane financing in the US, you’ll either have to be an actual US citizen or a permanent resident living in the country.
Income is also a major factor. If you do not have the necessary income needed to make continuous monthly payments, you’ll have a hard time qualifying for financing.
Lenders are going to take a look at your previous credit history as well. If you have an excellent credit score and a good credit history, then you shouldn’t have to worry one bit. On the other hand, if you have a negative credit history and appear to be a credit risk, you’ll have a tough time obtaining financing to purchase an aircraft.
The Application Process
After you’ve done all of your research, and have determined that you aren’t going to be a financial risk to lenders; it’s time to begin the application process.
Some lenders will require you to fill out an application on paper. Others will have no problem when you apply electronically online. After your application has been completely filled out, you’ll also need to provide a copy of last year’s tax return. And if you are self-employed, you may need to show business and personal tax returns for the last two years.
Other potential requirements include: a financial statement including liabilities and assets, pay stubs, property, bonds, stocks, and other important personal financial information.
According to AERO, provider of form-a-gasket parts, obtaining airplane financing is the first step in successful airplane ownership for many people.
Pay attention to these guidelines and you should have no problem obtaining aircraft financing now or in the future.