Jaken Finance Group · U.S. financing and ownership planning · Updated
An aircraft refinance should be measured against the loan you already have, at the same future date. A lower payment may improve cash flow. Whether it reduces financing cost depends on fees, interest, the repayment schedule, and the principal left unpaid when you sell or repay.
This worksheet compares two fixed-rate, fully amortizing schedules. It keeps the current principal balance consistent, adds financed fees only to the replacement loan, and includes cash-paid charges separately. Use it to prepare questions for Jaken Aviation, then reconcile the result with actual proposals and payoff information.
Compare the existing loan with the replacement
Work through the numbers
Aircraft refinance payment and cost comparison
All starting values are editable hypothetical examples, including rates and expenses. They are not market quotes or lender eligibility limits.
Current monthly payment
$5,067
Proposed monthly payment
$3,613
Monthly payment reduction
$1,454
A negative value means the new payment is higher.
Current loan balance at comparison date
$244,096
New loan balance at comparison date
$311,199
Cost savings including remaining debt and fees
$17,121
A negative value means refinancing costs more over this horizon.
First cost recovery within comparison period
8 months
First month cumulative payments plus unpaid debt recover all entered fees. Later costs may change the result.
Planning estimates only. Loan models use equal monthly payments and a fixed annual note rate, not a fee-inclusive APR. Enter taxes, fees, reserves, and operating costs where indicated. Actual lender terms and payment timing may differ. No tax savings or investment returns are assumed.
Use remaining amortization for the current loan, not its original term. The current principal input is the balance used to model future payments. Enter a separate payoff charge if one applies. A dated payoff may also include accrued interest or timing adjustments; reconcile those outside this simplified monthly model.
For the replacement, separate fees paid in cash from fees added to principal. Do not enter the same expense in both fields. The calculator assumes fees are paid at the start, rates remain fixed, and scheduled payments are made monthly. It does not model cash-out, rate resets, interest-only periods, or a maturity before full amortization.
Jaken Aviation’s refinancing guide provides a broader framework for payment reduction, total cost, and additional proceeds. Define your objective before requesting a proposal so a payment-driven solution is not mistaken for a cost-saving one.
Decide what the refinance needs to accomplish
Write a primary objective and a constraint. For example, an owner might seek lower required payments while limiting the increase in debt at a planned sale. Another might prioritize lower interest cost while keeping the remaining repayment period unchanged. These requests can lead to different structures.
If the need is additional cash, state that separately. A cash-out refinance increases borrowing and supplies new proceeds. Comparing it with an unchanged existing loan without identifying those proceeds produces a misleading cost difference. This calculator leaves cash-out out of the model so the replacement-loan comparison remains clear.
Also consider the ownership plan. If you intend to sell soon, new transaction costs have less time to be recovered. If the expected sale date is uncertain, test several horizons. A proposal can look attractive after one year and less attractive over a much longer period if amortization has been extended.
An illustrative five-year comparison
The starting example uses $400,000 of current principal, a hypothetical 9% note rate, and ten years of remaining amortization. The replacement uses a hypothetical 7% note rate over fifteen years, with $2,000 of financed fees and $3,000 of cash-paid fees. No current payoff charge is entered.
| Measure | Keep current loan | Refinance |
|---|---|---|
| Principal at the start | $400,000 | $402,000 |
| Monthly payment, rounded | $5,067 | $3,613 |
| Principal remaining after five years | $244,096 | $311,199 |
| Additional fees paid in cash | $0 | $3,000 |
The modeled monthly payment falls by approximately $1,454. But the replacement leaves about $67,103 more principal unpaid after five years. Including both schedules’ payments, remaining debt, and entered fees, the replacement saves approximately $17,121 over that five-year period.
The example reaches its first modeled cost recovery in month eight. That result depends entirely on the inputs and the model’s timing assumptions. Change the fees, rate, or horizon and the result changes. It is not a forecast of available pricing or a recommendation to refinance.
Understand the cost-savings calculation
For each loan, the worksheet adds payments made through the comparison date to principal still owed on that date. It then adds replacement fees paid in cash and the existing loan’s payoff charge to the refinancing path. The difference is the displayed cost savings.
Including unpaid principal prevents slower repayment from looking like free savings. Financed fees are already included in the replacement principal and its payments, so the worksheet does not add them again as a separate cash charge. A negative savings result means the refinancing path costs more over the selected horizon.
These are nominal dollars, without discounting. The calculation excludes tax effects, investment returns, and the financial value of receiving payment relief earlier. Those may be relevant to your business decision, but they should be evaluated explicitly rather than hidden inside a lower monthly number.
Read cost recovery as a dated result
The tool checks each month from the start through your chosen comparison period. It reports the first month when the refinancing path’s cumulative payments, remaining debt, and fees are no higher than the existing path. If no month qualifies, it shows that recovery was not reached within the period.
First recovery does not mean the replacement remains cheaper forever. Extending repayment can continue to generate interest after the original loan would have ended. Change the horizon to the intended sale date and again to a later date. Compare the resulting savings and balances each time.
A shortcut that divides upfront fees by monthly payment reduction measures a different concept. It can overlook financed fees and principal that remains unpaid. Use that shortcut only if you understand its limitations; this worksheet deliberately includes both balances when comparing financing cost.
Check maturity, resets, and payoff conditions
AOPA’s loan-term guidance explains that amortization and maturity can differ and that prepayment provisions depend on the loan. Review the existing note and the replacement proposal before selecting calculator inputs.
If either loan has a balloon, this fully amortizing refinance comparison is incomplete. Obtain the applicable payment and payoff schedules. The purchase financing calculator can illustrate a balloon on a single loan, but a refinance decision still needs both contractual structures and their timing.
For a variable-rate loan, compare more than the initial rate. Identify the reference rate, margin, reset frequency, limits, and payment treatment. Run explicit scenarios using the relevant schedule. A fixed-rate estimate cannot establish what a future reset will cost.
Prepare the aircraft and borrower evidence
Refinancing involves a new credit and collateral decision. Ask the proposed lender which current financial information, aircraft records, valuation evidence, ownership documents, and insurance information it needs. Do not assume a prior approval establishes eligibility today.
Explain changes since the original purchase. Examples include a different operating use, ownership entity, aircraft condition, avionics configuration, or business financial position. Give the financing provider enough context to identify questions early rather than discovering them during closing preparation.
Keep market value and loan balance separate in the worksheet. A projected aircraft value does not repay the current lender. If accepted value or other lender limits produce less funding than expected, identify the cash contribution needed to close before committing to the replacement.
Coordinate payoff and release work
Ask the closing professionals to identify who obtains the dated payoff, who confirms disbursement instructions, who sends funds, and who tracks releases. Changes in a payoff date may change the amount required. A payment confirmation is not the same evidence as a completed release.
The FAA’s clear-title guidance describes recorded security documents and releases. It also explains that the Aircraft Registration Branch does not perform title searches. Use the appropriate title and legal professionals to resolve transaction-specific questions.
Recheck the full ownership budget
Transfer the proposed annual debt service into the aircraft ownership cost calculator. Check whether the resulting cash relief actually covers the problem you identified. Maintenance, insurance, storage, and operating commitments remain part of the plan after refinancing.
For a pending replacement aircraft, also compare cash versus financing and review the used-aircraft purchase checklist. Bring the existing loan documents, current balance, proposed fees, intended exit date, and open questions to Jaken Aviation. Those details make the consultation useful before you decide whether a replacement loan fits.