Aircraft financing is a secured loan used to buy an airplane or helicopter, with the aircraft itself serving as collateral — much like a mortgage on a house or a loan on a car, but with aviation-specific rules around the collateral. If you're new to it, this guide explains what aircraft financing is, the main types of loans, who qualifies, and how the process works.
Key takeaways
- It's a secured loan — the aircraft is the collateral, which is why lenders care so much about its age, condition, and value.
- Typical structures run 15–20% down with terms up to 20 years on pistons, and different structures (balloons, engine programs) on turbines and jets.
- Both you and the aircraft are underwritten — your credit and income, plus the airplane's specs, logs, and history.
- A broker shops multiple lenders for you; Jaken Aviation is a brokerage, not a lender.
How Aircraft Financing Works
An aircraft loan works like other secured lending: a lender advances most of the purchase price, you put down the rest, and you repay principal and interest over a set term. Because the airplane secures the loan, the lender registers a lien against it (recorded with the FAA), and that lien is released when the loan is paid off. If payments stop, the lender can repossess the aircraft — the same principle as any secured loan.
What makes aviation different is the collateral. Airplanes have long, well-documented service lives, published maintenance requirements, and active resale markets, so lenders lend against them readily — but they scrutinize the specific aircraft closely: its age, total time, engine time since overhaul, damage history, avionics, and the completeness of its logbooks. A clean, well-documented airplane finances more easily than a cheaper one with question marks.
Types of Aircraft Loans
Most purchases use a straightforward fixed-rate installment loan that fully amortizes over the term. Beyond that, common variations include:
- Balloon loans — lower payments during the term with a large final payment; common on turbines and jets to manage cash flow.
- Refinancing — replacing an existing loan with a better rate or cashing out equity for upgrades.
- Business / entity financing — the buyer is an LLC or company, underwritten partly on business financials. See our LLC financing guide.
- Equipment financing — for avionics upgrades or engine overhauls on an aircraft you already own.
Rates and terms depend on the aircraft class, your credit, the down payment, and the loan size. Our aircraft loan rates guide covers current ranges.
Who Qualifies — and How to Start
Qualifying comes down to your creditworthiness and the aircraft. Lenders look at your credit score, income or business cash flow, existing debt, and the down payment you can make, alongside the airplane's eligibility. Strong credit and a clean, well-documented aircraft earn the best terms; weaker credit or an older airframe means more down and a shorter term. Our loan requirements guide details what lenders check.
The usual path is: get pre-qualified, find the aircraft, submit a full application with the airplane's details, complete a pre-buy inspection and appraisal, bind insurance, and close. A brokerage manages this across multiple lenders so you compare offers on one application rather than applying to each bank yourself.
Rates, terms, and figures in this article are illustrative examples 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 information is general and not a substitute for advice from a qualified CPA.
Frequently Asked Questions
Is aircraft financing like a car loan or a mortgage?
It's a secured installment loan, conceptually similar to both — the aircraft is collateral and a lien is recorded (with the FAA). Terms are typically longer than a car loan and the collateral review is more detailed, given the aircraft's maintenance and value considerations.
How much do I need to put down?
Commonly 15–20% for a well-qualified buyer on a piston aircraft, more on older airframes, turbines, or with weaker credit. Larger down payments generally earn better terms.
Can I finance a used or older aircraft?
Yes. Used aircraft finance readily; older airframes typically need a larger down payment and a shorter term, and the aircraft's condition and logs matter more.
Do I need a broker to finance an aircraft?
No, but a brokerage shops your loan across many lenders on one application and can find better fits than applying to banks one at a time. Jaken Aviation is a brokerage, not a lender.
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