Aircraft Loan question about minimum monthly payment?
Hi folks,
I’m in the process of attempting to finance an aircraft buy. Because this aircraft is right around the minimum amount most finance companies will finance at all, price-wise, I’m the quandary of either having to go cash on it or finance a higher amount aircraft. I have the cash but do not wish to place so much of my liquid into an aircraft, as I need my cash for emergency savings, travel and medical emergencies, you know, life.
I also do not wish to be stuck with a high monthly payment, as I have the equity in cash to only require to finance about half what the minimum amount these companies want me to take out before they’ll agree to entertain the financing.
My question is, can I request the full amount as they want me to, and once the re-payment kicks in, make a lump sum payment to an amount that would re-adjust my minimum monthly payment to the level I wanted, while keeping the amortization schedule intact? Or will that lump sum payment just adjust my payoff date to an earlier date, keeping me tied to the original high monthly payment every remaining month? I know with car loans you can just dump a huge lump sum and effectively adjust your monthly payment for the remainder of the loan period. I’ve also heard in the case of mortgages you can’t do that, since any lump sum or additional payment to principal would only change the payoff DATE of the loan, and will still force you to make the original payment amount.
This is a matter of monthly liquidity, not outright affordability, as I expect to keep the aircraft for a long time, so I would rather pay a premium on a longer payoff for having the ability of keeping my liquid monthly state free to tackle savings and emergencies. I do not wish to tie up my immediate liquid on an aircraft just because finance companies refuse to cater properly to the under 50K aircraft market.
Any feedback on whether lump sum payments do in fact lower my minimum monthly payment (what I want) or just go towards an early payoff date (what I’m not interested in, from a liquidity standpoint) would be appreciated. Thanks!
The loan has no pre-payment penalty according to the financing company
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Tags: affordability, aircraft market, aircraft purchase, amortization, amortization schedule, car loans, finance companies, hi folks, liquidity, loan period, long time, lump sum payment, lump sum payments, medical emergencies, mortgages, predicament, remainder
Pol-Enrico G, Get an online car loan quote. http://www.autoadvicetips.com/Auto-Loans.html The automated questionairre will let you know if you can be approved. It will only take a few minutes.
If you make a lump sum payment up front it will reduce the term of the loan, not the payment amount. You will still have the large payment but you will pay for a shorter term and larger percentages of your payment will go to principle instead of interest.
Enter the initial terms in an amortization calculator and then look at where the priciple paid equals the amount you will pay in a lump sum up front. The schedule should be right from that point forward aside from the dates.
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