The short answer
Aircraft financing is a secured loan like a car loan, but with key differences: much longer terms (up to 20 years), a required pre-buy inspection and appraisal, closing through escrow with an FAA-recorded lien, mandatory insurance, and specialized aviation lenders.
The Main Differences
- Term length: aircraft loans run up to 20 years versus a few years for a car — because airplanes have long, documented service lives.
- Collateral scrutiny: lenders require a pre-buy inspection and appraisal, and care about engine time, logs, and damage history.
- Closing: transactions run through an escrow/title company, and the lender's lien is recorded with the FAA Registry, not a state DMV.
- Insurance: lenders require coverage bound before funding, often with a breach-of-warranty endorsement.
- Lenders: specialized aviation lenders, not general auto lenders, handle these loans.
What's the Same
Both are secured installment loans: the asset is collateral, you make fixed monthly payments, and a lien is released at payoff. Your credit, income, and down payment drive the rate in both cases. The differences are in degree and process, not the basic concept — which is why understanding the aviation-specific steps matters.
Figures in this article are illustrative for the 2026 market and are not offers of credit. Jaken Aviation is a licensed aircraft financing brokerage — a division of Jaken Finance Group — and does not make loan decisions. All financing is subject to lender approval. Tax and legal information is general; consult a qualified professional.
Related Questions
Are aircraft loan rates higher than car loans?
They're in a different market and depend on the aircraft and your profile, but the longer term and specialized collateral make direct comparisons imperfect. Compare aircraft offers on APR.
Why is there a pre-buy inspection?
Because the aircraft is the collateral, the lender wants confirmation of its condition before funding. It also protects you from an expensive surprise.
Why does escrow handle closing?
Aircraft transactions use a neutral escrow/title company to verify clear title, hold funds, and file the FAA paperwork — protecting buyer, seller, and lender.
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