Airplane Money For Everyone

Buying an aircraft can be a great way of indulging in a fun hobby or a small business such as airplane charter flights to the Caribbean. But the process of buying a plane can be a big expense. Often, you will need to take a loan. This can prove to be a difficult task, especially you have poor credit. Let’s take a closer look at some of the ways you can get the funding you need.

Getting a Loan From a Bank

When considering applying for a loan, many people will turn to a bank. There are a few reasons why people turn to these lenders. First, they tend to be very well-known and respected institutions. Also, you probably already have an account. Keeping the loan and the rest of your banking in the same place will simplify things.

But there are a few substantial downsides that you should be aware of. First, the loan application process can be very complex. Usually, you will need to fill out lots of paperwork, trying to understand complex documents. Another major problem is the length of time it takes to get approved. It might be a few months before you get the money.

To make matter worse, there is no guarantee that you will get approved at all. There are dozens of conditions that you will need to meet. You’ll need to have a reliable job and a steady source of income. Bad credit might be a deal-breaker. Because of these factors, people are increasingly turning to alternative lenders.

Why Use Alternative Financing?

Alternative financing is another option that you might want to explore. This is becoming increasingly popular. There are plenty of advantages that this approach offers to borrowers.

First, the process is a lot faster than going through the bank. You won’t need to fill out as much paperwork. This will allow them to make a quicker decision about whether or not to approve your application. In some cases, you can have the money in your account within a few days.

Another huge benefit is the increased flexibility that these arrangements can provide. You o have more negotiating power, with many lenders willing to alter the agreement so the terms better suit you.  This will make it easier for you to make the repayments.

A third massive advantage is the ability to get a loan even if you have some financial trouble. As we mentioned, the credit report is one of the most important tools that a bank will look at. If you don’t meet their requirements, they won’t hesitate to deny your application. But with an alternate funding option, they are bad credit OK. This makes it a lot easier for people to get a loan.

Types of Alternative Loan Financing Options

Hopefully, you now have a better idea of why you might want to explore the world of alternative funding. Let’s take a closer look at some of the options that you might come across and the pros and cons of each choice.  

First, you might want to consider an unsecured loan. This means that you won’t need to put up any collateral. This means that there is no risk of losing your plane. However, if you default on the loan, you might be made personally liable. Also, because of the additional risk, this might not be available to all types of borrowers. Usually, you will need to have a good credit score to qualify. Furthermore, you might need to pay a higher interest rate to compensate for the additional risk. 

On the other hand, you might decide to use a collateralized loan. Often, the airplane will be linked to the loan. If you default the lender can seize the plane. This means less risk for the lender, resulting in a lower interest rate. Plus, having a real-world asset to secure the debt means that it will be available to a wider range of borrowers.

Choosing the Right Type of Loan

There will be plenty of loan options for you to explore. To make sure that you are getting a good deal, there are a few things that you should be looking for.

The first thing to consider is the value of the loan, it has to be enough to pay for the purchase. An airplane is a big purchase. Even a second-hand plane can be expensive. A single-engine plane will cost between $15,000 and $100,000. If you want to get multiple engines, you might need to pay around $300,000.  At the luxury end of the market, a private plane can cost millions. Remember, these are just the upfront costs. They don’t take into account things like fuel or maintenance.

The next thing to do is look at the interest rate. If you are going to an alternate lender, you can expect it to be higher, to compensate them for the increased risk. But it’s important to compare it to other loans on the market. This will let you make sure that you are getting a reasonable deal.

The third element to consider is how long the loan will last. Because of the size of the loan, it will often be a longer period, often taking place over years. This will give you plenty of time to space out the repayments.

Finally, one of the most important elements to look at is the amount you will be expected to repay each month. You need to be confident that you can afford to make the payments on the airplane loan. If you can’t, talk to the lender. They might be able to adjust the terms to make it easier for you to keep up.

Finding a Good Alternate Lender

Another common concern is that it can be difficult to find a good alternate lender for aircraft loans. To make this process easier, there are a few simple things to look for. First, it’s important to make sure that you are using a trusted lender. Look for online reviews from former borrowers. Next, it’s important to compare the loan offerings. This will allow you to make sure that you are getting a good deal.  

The Loan Application Process

One of the benefits of using alternative funding sources is that the application process tends to be fairly straightforward. First, you will need to do some research. Select the right lender and loan for you.

Once you have found a good loan, talk to the lender and ask them to send over the documents. The good news is that the loan documents are often easy to understand and fill out. If you have any questions, give the lender a call.

After you have filled everything in send it back. Most lenders can complete this process online, saving you time. They will then review your application and decide whether they are going to approve it.

Once you are approved, the money will be transferred to your account. This will occur quickly. Depending on the lender, you might be able to get the funds within a few days. This will allow you to seize a good buying opportunity.

Tips For Improving Your Chances of Getting a Loan

There are a few simple ways that you can improve your odds of getting aviation finance. First, you can try to increase your down payment. The minimum amount that you will need to put down will depend on the lender. Though many won’t object to you offering a larger down payment, it reduces the risk to the lender. As a result, they will be more likely to take your debt on.

Another idea is to use a co-signer. This will need to be someone with a good credit history. If you are unable to pay your debts, the co-signer will become responsible. This can be a big obligation, especially when paying for something as large as an airplane. Because of this, you should make sure that the co-signer understands their role before they take on the responsibility.

Sometimes, they might be struggling to get over a poor credit history. If this is the case, you will have to explain why it’s so low. For example, you might have lost your job and might have needed to rely on credit cards. But, since you are working again, the risk of default is lower.

Finally, you have the opportunity to improve your credit. This can involve things like paying down your debt or correcting inaccurate statements on your account. This can be a slow process. It might take a few months before you start to see the benefits. But seeing that you are making efforts to improve your financial future will give lenders reason to approve your loan.

Conclusion

Many people dream of owning their own airplane. Some like the freedom, being able to fly anywhere they want. Others are attracted to the peace of being in the sky with no one around for miles. Still, others are wanting to start their own business such as charter flights to the Caribbean The good news is that this doesn’t need to stay as a dream. Even if you have bad credit, you can get a loan to purchase your own private plane. There are lots of alternative funding sources that are able to offer aircraft loans. So, start researching this market to find the right loan for you.  Better yet, contact Drew at South Florida Funding Group - a good place to secure airplane financing: 786-544-2700