Buying your first aircraft is an exhilarating milestone in any pilot's journey. Whether you've been renting for years or are ready to step up from a share in a flying club, aircraft ownership opens new horizons of freedom and adventure. But for most first time aircraft buyers, the financing process presents unfamiliar territory. Understanding aircraft loan requirements, knowing how to get a loan for a plane, and preparing properly for your airplane loan application dramatically improves your chances of approval and helps secure the best available terms.

This comprehensive guide walks you through everything you need to know before, during, and after the application process. From credit requirements to document preparation to setting realistic expectations, we'll help you navigate your first aircraft loan with confidence.

Don't Get Grounded: Your Ultimate Aircraft Loan Document Checklist

Aircraft lenders require comprehensive documentation to evaluate loan applications. Having these materials ready before you apply streamlines the process and demonstrates preparedness that lenders appreciate.

Personal Financial Documents

Gather these documents to document your financial position:

Tax Returns:

  • Last 2-3 years of complete federal tax returns (all pages, all schedules)
  • Include W-2s and 1099s for each year
  • Business returns (if self-employed or own a business)

Personal Financial Statement:

  • Comprehensive listing of assets (real estate, investments, bank accounts, other aircraft)
  • Complete list of liabilities (mortgages, car loans, credit cards, other debts)
  • Most lenders provide their own form to complete

Proof of Income:

  • Recent pay stubs (last 30 days) for employed applicants
  • Employment verification letter (some lenders request directly from employer)
  • Profit & loss statements if self-employed

Bank Statements:

  • Last 2-3 months of statements for all accounts
  • Shows liquidity and verifies asset claims
  • Large deposits may require explanation

Investment Account Statements:

  • Recent statements for brokerage accounts, retirement accounts
  • Verifies asset values claimed on financial statement

Aircraft-Related Documents

When you've identified a specific aircraft, gather:

Aircraft Specifications:

  • Make, model, year, serial number, N-number
  • Equipment list and installed avionics
  • Total time, engine time, prop time (as applicable)

Purchase Agreement:

  • Signed purchase contract specifying price and terms
  • Contingencies for financing and pre-buy inspection

Aircraft Valuation:

  • Lenders typically obtain independent valuation
  • Having your own assessment helps set expectations

Pre-Buy Inspection Report:

  • Often required before funding
  • Some lenders accept inspection during contingency period

Insurance Documentation

Insurance Quote or Binder:

  • Hull coverage for full aircraft value
  • Liability coverage meeting lender minimums (typically $1 million+)
  • Lender named as loss payee

For detailed information on aircraft insurance requirements, see our guide on aircraft insurance and financing.

Cleared for Takeoff? Decoding the Credit Score Requirements for Aircraft Financing

Your aircraft financing credit score significantly impacts loan availability and terms. Understanding how lenders evaluate credit helps you prepare and set realistic expectations.

Minimum Credit Score Requirements

While requirements vary by lender, general guidelines for aircraft financing include:

  • 700+: Access to most lenders with competitive rates
  • 680-699: Good options available, rates may be slightly higher
  • 660-679: Limited lender options, may require larger down payment
  • 640-659: Specialist lenders only, higher rates, stricter terms
  • Below 640: Very difficult to obtain traditional financing

Aviation lenders typically look for higher credit scores than auto or mortgage lenders because aircraft are mobile assets that can be moved across jurisdictions, making recovery more challenging.

Beyond the Score: What Lenders Evaluate

Credit scores are just one factor in the lending decision:

Credit History Depth:

  • Lenders prefer established credit histories (7+ years)
  • Thin credit files may require additional documentation
  • Mix of credit types (mortgage, installment, revolving) viewed positively

Payment History:

  • Recent late payments are red flags
  • Patterns of delinquency concern lenders
  • Explanations for isolated issues may be considered

Debt-to-Income Ratio:

  • Total monthly debt payments divided by gross monthly income
  • Aircraft loan payment added to existing obligations
  • Most lenders want DTI below 45-50% including new aircraft payment

Bankruptcies and Judgments:

  • Recent bankruptcies (within 2-4 years) often disqualify applicants
  • Older bankruptcies with clean recent history may be overlooked
  • Outstanding judgments typically must be resolved

Improving Your Credit Before Applying

If your credit needs work, consider these strategies before applying:

  • Pay down credit card balances (utilization below 30% ideal)
  • Resolve any derogatory items or disputes
  • Avoid new credit applications that create hard inquiries
  • Ensure all accounts are current with no missed payments
  • Check credit reports for errors and dispute inaccuracies

For more details, see our in-depth guide on the impact of credit score on aircraft loans.

Ready for Your First Aircraft Loan?

Jaken Aviation helps first-time buyers navigate the aircraft financing process. Let us connect you with lenders who work with new aircraft owners.

Start Your Application

Your Flight Plan: Navigating the Aircraft Loan Process from Application to Approval

Understanding the typical loan process helps you prepare appropriately and manage the timeline effectively.

Step 1: Pre-Qualification (Days 1-3)

Before making offers on aircraft, seek pre-qualification:

  • Submit Basic Information: Income, assets, credit score range, target aircraft type and value
  • Receive Preliminary Terms: Indicative interest rate, likely loan-to-value, and estimated payments
  • Obtain Pre-Qualification Letter: Shows sellers you're a serious, capable buyer

Pre-qualification typically involves a "soft" credit pull that doesn't affect your credit score. This step is recommended before actively shopping for aircraft.

Step 2: Aircraft Selection and Purchase Agreement (Timing Varies)

With pre-qualification in hand:

  • Search for aircraft that fit your mission and budget
  • Make offers with financing contingencies
  • Negotiate purchase terms
  • Execute purchase agreement

Ensure purchase agreements include adequate time for financing approval (typically 30-45 days) and provisions for pre-buy inspection.

Step 3: Full Application Submission (Days 1-5)

With a signed purchase agreement:

  • Complete formal loan application
  • Submit all required documentation
  • Authorize credit report pull (hard inquiry)
  • Provide aircraft details and purchase agreement

Having documents prepared in advance accelerates this phase significantly.

Step 4: Underwriting (Days 5-15)

The lender evaluates your application:

  • Credit Analysis: Review of credit reports and history
  • Income Verification: Confirmation of stated income and employment
  • Asset Verification: Confirmation of down payment funds and reserves
  • Aircraft Valuation: Independent assessment of aircraft value
  • Title Search: Verification of clear title with no undisclosed liens

Respond promptly to any lender questions or requests for additional documentation—delays here extend the overall timeline.

Step 5: Conditional Approval (Day 15-20)

Most approvals come with conditions:

  • Satisfactory pre-buy inspection
  • Proof of insurance meeting lender requirements
  • Any final documentation items
  • Clear title confirmation

Work promptly to satisfy conditions and keep the transaction moving.

Step 6: Closing (Days 20-30)

Upon satisfying all conditions:

  • Final Commitment: Lender issues final loan commitment
  • Closing Documents: Promissory note, security agreement, UCC filings
  • Escrow Coordination: Working with escrow agent for funds transfer
  • Title Transfer: Bill of sale and FAA registration transfer
  • Funding: Lender wires funds to escrow for disbursement

For more on the closing process, see our guide on the role of escrow in aircraft purchases.

Insider Secrets: 5 Common Mistakes That Crash First-Time Aircraft Loan Applications

Learn from others' experiences and avoid these common pitfalls that can derail first-time applications.

Mistake 1: Underestimating Total Costs

First-time buyers often focus solely on purchase price, forgetting about:

  • Closing costs: Title search, escrow fees, documentation fees (2-5% of loan amount)
  • Insurance: Annual premiums can be substantial (1-3% of hull value)
  • Pre-buy inspection: $1,000-$5,000+ depending on aircraft complexity
  • Initial maintenance: Items identified in pre-buy may need attention
  • Operating reserves: Lenders want to see funds for ongoing operation

Solution: Budget for total acquisition cost, not just purchase price. Have reserves beyond down payment.

Mistake 2: Making Major Financial Changes

Avoid these during the loan process:

  • Changing jobs or employment status
  • Making large purchases or taking on new debt
  • Moving large sums between accounts without documentation
  • Co-signing for others' loans

Solution: Keep finances stable from application through closing. Major changes require explanation and can delay or derail approval.

Mistake 3: Insufficient Down Payment

Aircraft lenders typically require meaningful down payments:

  • Most lenders require 15-20% minimum for qualified borrowers
  • Marginal credit or older aircraft may require 25-35%
  • Gifts may be acceptable but require documentation

Solution: Verify down payment requirements before shopping. Ensure funds are seasoned (in your accounts for 60+ days) and documented.

Mistake 4: Ignoring Aircraft-Specific Restrictions

Lenders have preferences about which aircraft they'll finance:

  • Age restrictions (some lenders won't finance aircraft over 35-40 years old)
  • Value minimums (some lenders require minimum $75,000-$100,000 loans)
  • Type restrictions (experimental, homebuilt, or unusual categories may face limited options)
  • Condition requirements (aircraft must be airworthy and well-maintained)

Solution: Verify your target aircraft is financeable before making offers. Ask lenders about specific aircraft types.

Mistake 5: Not Working with an Aviation Finance Specialist

Aircraft financing differs significantly from mortgages or car loans:

  • Fewer lenders mean less competition unless you know where to look
  • Aviation-specific requirements aren't obvious to general lenders
  • Terms and structures vary significantly between aviation lenders

Solution: Work with a broker or lender specializing in aviation finance. Their expertise often secures better terms and smoother transactions. See our article on why you need an aircraft finance broker.

Setting Realistic Expectations

Timeframe Expectations

Plan for a realistic timeline:

  • Simple transactions: 3-4 weeks from application to closing
  • Typical transactions: 4-6 weeks
  • Complex situations: 6-8+ weeks

Factors that extend timelines include unusual aircraft types, complex borrower situations, title issues, or incomplete documentation.

Rate Expectations

Aircraft loan rates typically run higher than home mortgages but similar to or below auto loans:

  • Well-qualified borrowers: Prime + 1-3%
  • Average credit profiles: Prime + 3-5%
  • Marginal credit or higher-risk situations: Prime + 5-8%

Rates vary with aircraft age, loan term, and loan amount. Larger loans on newer aircraft typically receive better rates.

Term Expectations

Loan terms vary by aircraft and lender:

  • Newer aircraft (0-10 years): Up to 20-year terms available
  • Mid-age aircraft (10-25 years): Typically 10-15 year terms
  • Older aircraft (25+ years): Often limited to 7-10 years

Longer terms reduce monthly payments but increase total interest paid. Balance payment affordability against total cost.

Conclusion

Your first aircraft loan application doesn't have to be intimidating. With proper preparation—gathering documentation, understanding credit requirements, and knowing what to expect—you can navigate the process confidently and successfully.

The key is starting early, being organized, and working with professionals who understand aviation finance. Take time to prepare properly, and you'll find the path from loan application to aircraft ownership smoother than you might expect.

At Jaken Aviation, we specialize in helping first-time aircraft buyers understand their options and secure appropriate financing. We know the questions you'll face, the documentation you'll need, and the lenders who work well with new aircraft owners. Let us help you turn your aircraft ownership dreams into reality—reach out today to start your journey.