Choosing a loan that can make your aviation dreams take flight is something that you wouldn’t want to rush through. There are various factors such as your credit history and income that will determine what type of financing you get. There are four things that affect your aircraft financing loan that you need to be aware of.
Factors such as the Age, make and Model will affect your loan
Age is not just a number to financers. The age of your aircraft will determine what type of loan you get. The older it is the harder it will be to finance due to the possible risks it poses. If you are looking to buy a turbine airplane or piston twins, you will have to be aware that this depreciates quickly. This will mean there will be a higher payment in terms of the repayment plans.
It’s advisable that you compare aviation loan quotes to ensure that you get the best deal for your buck, instead of being stuck with a perpetual l nightmare of high interest rates that make it hard to repay the loan. You will also have to ask yourself whether financing an old model with a pricey loan is worthwhile instead of buying a new one altogether.
Are you sure you’re getting the right cover?
Your lender will evaluate whether you are applying for a loan that matches the usage of your aircraft and if you will be able to make repayments. They will look at whether you are using your aircraft for business, personal, or commercial usage. The use will determine what terms come with your loan.
It is also in your best interest to check the features of the loan that you are applying for so that you can know that you have not bitten off more than you can choose. A financial advisor is one way you can seek professional help to help you gauge the right amount of cover. The general rule is that the more you use your aircraft the more it depreciates, therefore you will pay more for cover.
Sugar coating the history of the aircraft
Your lender will request a detailed information for your airplane, and it will work in your favour if you supply a detailed history including its maintenance. This will increase the chance of you securing good terms for your loan.
You can supply photos, a timely maintenance and damage history so that your lender can provide you with adequate cover. Leaving out important details like this is like shooting yourself in the foot. If you realise that your aircraft is costly to maintain then maybe it’s time to jump a sinking ship and apply for a loan that can get you a new one.
The safety of the aircraft
If your aircraft doesn’t have the necessary safety features it will automatically raise a red flag for your lender. If it Is falling apart and not safe it is highly likely that you won’t find a lender who will be willing to finance you. The best thing to do in this situation is to apply for a loan that will help you buy the safety features that are needed or shop for a loan that will help you get a new aircraft that will be in the interest of yours and everyone else’s safety.
A bonus is that you should always read the fine print of any loan you apply for. View the features to see whether they match the type of flyer you are to make sure that its budget friendly. Luckily for you, the internet has aided in decreasing the footwork by offering plenty of comparison sites for your aviation needs.