Aircraft loan calculator

One formula, written out

Every panel on this page runs through one amortization function. The monthly payment is payment = A × r ÷ (1 − (1 + r)−n), where A is the amount financed, the price minus your cash down plus any fees you finance, r is the annual rate divided by twelve and then by a hundred, and n is the term in months. If the rate is zero the payment is simply A divided by n. Each month, interest is the remaining balance times r, the rest of the payment goes to principal, and the balance falls by that principal. The final payment absorbs any rounding, so the schedule reconciles to its own summary to the cent.

The other panels are the same function again

The term strip reruns the function with only the term changed. The extra payment panel reruns it with your extra amount added to each month's principal until the balance reaches zero. The flight-hour panel takes the first year of payments from the schedule, adds the fixed costs you entered, and divides by your hours. Only what you typed goes in, and the same shared amortization function runs every calculator on AssetLoanCalculator.

If you have a written quote, enter the rate and term from it and the cash down your lender asked for. If you do not have one yet, the page still works, but it will not supply a rate, a term or a down payment for you. No figure it could offer would be your lender's. So try the numbers you are hoping for, then read the term strip and the rate spread under the result. The Prime Rate line gives you one published reference point to place a quote against, and the strip shows what a year or two more on the term does to total interest. When the real quote arrives, type its numbers over your trial ones and recompute.

The recording system in the statute

If your lender takes the aircraft as collateral, that interest gets recorded in a federal system. Under 49 U.S.C. 44107(a), the Administrator of the Federal Aviation Administration shall establish a system for recording “conveyances that affect an interest in civil aircraft of the United States”. The section is titled “Recordation of conveyances, leases, and security instruments”, per the statute text. The regulation that implements it, 14 CFR Part 49, “applies to the recording of certain conveyances affecting title to, or any interest in” aircraft registered under the registration statute. And 14 CFR 49.31 lists what can be recorded against an aircraft, including a “bill of sale, contract of conditional sale, assignment of an interest under a contract of conditional sale, mortgage, assignment of mortgage, lease, equipment trust, notice of tax lien or of other lien, or other instrument affecting title to, or any interest in, aircraft”.

What the security agreement itself must say

For the security agreement, the FAA's Aircraft Registration Branch instructs that the complete original agreement is sent to the Branch for recording. The FAA says the agreement must “contain words which state that the aircraft owner grants the secured party a security interest in the collateral”, and must “identify the collateral by manufacturer name, model designation, serial number, and N-Number”, per the same FAA page. Under 14 CFR 49.17(d)(1), “a security agreement must be signed by the debtor”. Under 14 CFR 49.33(b), a conveyance is eligible for recording only if it describes the aircraft by make and model, manufacturer's serial number, and United States registration number, or other detail that makes identification possible. And under 14 CFR 49.13(c), “no conveyance or other instrument need be acknowledged” in order to be recorded under Part 49, with the law of the place of delivery deciding when acknowledgment is required for validity there.

What comes back, and in what order

Once it records the agreement, the FAA says it will return a Conveyance Recordation Notice, AC Form 8050-41, to the secured party, and that the notice may be used as a release if the secured party signs it and returns it to the Aircraft Registration Branch, per the FAA's recording instructions. The statute's recording system also reaches “releases, cancellations, discharges, and satisfactions” related to a conveyance, lease, or instrument it has recorded, under 49 U.S.C. 44107. Under 49 U.S.C. 44107(d), the Administrator shall keep a record of the time and date each conveyance, lease, and instrument is filed and recorded, and shall record them in the order of their receipt, indexed by the identifying description of the aircraft and the names of the parties.

The limit that matters to a borrower

Under 14 CFR 49.17(c), the recording of a conveyance “is not a decision of the FAA that the instrument does, in fact, affect title to, or an interest in, the aircraft or other property it covers”. Whether a given agreement does that is a question for you and your lender, not for the registry and not for this page.

How the monthly payment is calculated

From the amount financed, the monthly rate and the number of months, using the formula above. A higher amount or rate raises the payment. A longer term lowers the payment but adds months of interest. The result restates the exact inputs so you can reproduce it by hand.

What a bigger cash down does

It shrinks the amount financed, and at a fixed rate and term the payment and the total interest shrink in proportion. Total cost moves less than total interest does, because the cash you put down is still part of what you paid. Change the cash down field and recompute to see both effects at once.

Why a longer term costs more in total interest

Interest is charged on the balance every month, and a longer term keeps a larger balance alive for more months. The lower payment is real, and so is the extra interest. The term strip puts the two side by side for the terms a year and two years either side of yours.

Why the cost per flight hour falls when you fly more

Because the loan payment is the same twelve times a year whether the aircraft flies or sits, and your hangar, insurance and inspection budget behave the same way. Dividing a fixed yearly sum by more hours gives a smaller number per hour. The hours strip shows that at half, one and a half times and double your hours, with nothing else changed. Per-hour costs like fuel and a maintenance reserve do not fall; they are the same on every hour.

What the extra monthly payment changes

Every extra dollar goes to principal in the month you pay it, so the balance falls faster, later months charge less interest, and the loan ends early. The panel reports the payoff month, the months saved and the interest saved for the extra amount you typed. It never assumes an extra amount on its own.

Is the Prime Rate my rate

No. It is the bank prime loan rate the Federal Reserve publishes in its H.15 release, shown here as a labeled reference point and kept out of the payment math. Enter the rate your lender actually quoted; the page subtracts the two so you can see the gap.

Using the tool before you have a lender quote

Enter the price you expect to pay and the figures you hope to get, treat them as trial numbers, and read the term strip and the spread. The page never fills in a rate, term or down payment for you. When the written quote arrives, type its numbers over your trial ones.

What the financed fees field is for

Any fee your lender rolls into the loan instead of collecting up front. It is added to the amount financed, so it accrues interest like the rest of the balance. Fees paid in cash at closing do not belong here, because they do not change the payment.

Where the numbers come from

Every payment, total and schedule row on this page is recomputed in code from figures you typed, by one shared amortization function the whole site uses, and the schedule reconciles to its own summary. The only external number anywhere here is the published Prime Rate, fetched from the Federal Reserve H.15 release and cross-checked against the federal funds target before it is shown. If it cannot be verified it is held, and the benchmark paragraph does not appear at all.

Who built it

I built the calculators on this site from the ground up, including the in-browser tools that print their own month by month schedule and reconcile every row back to the summary. I added the flight-hour reading because an aircraft loan is the one loan on this site whose cost is usually judged per hour flown, and no market figure can stand in for your hours or your costs. I am Michal Lip.