Should I Pay Off My Airplane Loan or Invest the Money Instead?

By: Adam Meredith

AOPA March 2021 article If you’re in an airplane already, and you’re uncertain as to whether you should pay off your aircraft loan or keep the cash and invest it, our advice would be to hang on to the money. You might consider refinancing, but we caution against paying off the loan. With lending rates as low as they are right now, and with aircraft market values looking as though they’re going to continue to be as good, if not better, in the near term, now is the time to take a serious look at refinancing your aircraft loan. 

At the very least, assess what you currently have. Could you do better? It’s a good time to compare and contrast.

We’re in a period where more than likely prices are going to be flat to increasing. If that stays true, then you’re far better off—if you can afford the cash flow—keeping a loan on the airplane and investing the money in the market.

Conversely, if you are concerned that your situation is too fluid and you foresee that things may go sideways, and you might not be able to afford the loan payments on your current aircraft, this is a great time to sell. Supply is low, demand is elevated, and airplane prices reflect those realities.

That also applies to financing a new aircraft. For the most part, we’re seeing airplane values continuing to remain strong and trend upward. Low rates and appreciating values make a purchase now a smart move. So, assuming you’re comfortable—you’re not going to lose your job—and you’re confident that you’ll have the cash flow to support your loan payments, then we would finance all day long.

Great advice. Great rates. From helpful and responsive reps you can trust. Three good reasons to turn to AOPA Aviation Finance when you are buying or refinancing an airplane. If you need a dependable source of financing with people who are on your side, just call 800.62.PLANE (800.627.5263), or click here to request a quote.

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