Just like a home mortgage, an aircraft loan isn't necessarily permanent. Refinancing your aircraft loan involves taking out a new loan to pay off your existing one. It's a powerful financial tool that can help you adapt to changing market conditions or your own financial situation.

Top Reasons to Refinance Your Aircraft

1. Lower Your Interest Rate

This is the most common reason to refinance. If interest rates have dropped significantly since you first financed your aircraft, you may be able to secure a new loan with a lower rate, reducing your monthly payments and the total interest paid over time.

2. Change Your Loan Term or Payment

Your financial situation can change. You might want to refinance to shorten your loan term and pay off the aircraft faster. Conversely, if you need to improve your monthly cash flow, you could refinance to extend the amortization period, thereby lowering your monthly payments.

3. Access Equity (Cash-Out Refinance)

If your aircraft's value has increased or you've paid down a significant portion of your loan, you have equity. A cash-out refinance allows you to borrow against that equity, providing you with tax-free cash that can be used for a major upgrade (like avionics or an engine overhaul), other investments, or business needs.

Is it Time to Refinance?

Market conditions are always changing. Let us provide a no-obligation analysis of your current loan to see if refinancing makes sense for you.

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The Refinancing Process: What to Expect

The process for refinancing is very similar to securing an initial purchase loan. It involves:

  1. Application: Submitting an application with your current financial information.
  2. Aircraft Appraisal: The lender will require a new desktop or full appraisal to determine the aircraft's current market value.
  3. Underwriting: The lender reviews your financial profile and the aircraft's value to approve the new loan.
  4. Closing: The new lender pays off the old lender, and your new loan terms begin.

Deciding to refinance is a strategic financial decision. By evaluating current interest rates and your personal financial goals, you can ensure your aircraft loan continues to work for you long after the initial purchase.