Choosing an Aircraft Loan Term: 5, 10, 15 or 20 Years Compared
This guide is for buyers choosing how long to finance a piston aircraft. It covers what lenders allow, what each term costs in payment and total interest, and how term length affects your equity if you sell.
What aircraft loan terms do lenders offer?
| Aircraft or loan | Typical maximum term | Notes |
|---|---|---|
| Single-engine piston, loan of $75,000 or more | Up to 20 years | AOPA lists 5 to 20 years; 20 years only at $75,000 and above |
| Single-engine piston, loan under $75,000 | Shorter than 20 years | Maximum varies by lender; ask for the cap at your loan size |
| Multi-engine piston | 10–15 years | AOPA's lenders generally want 1970 and newer twins, with possible exceptions |
| Aircraft built before 1960 | May be shorter | AOPA: may require a larger down payment and/or shorter term |
Source: AOPA Aviation Finance, piston aircraft and AOPA on aircraft age. FLYING Finance also advertises up to 20-year amortization. Individual lenders set their own limits.
Small loans have a practical consequence. A $60,000 loan at 7.75% costs $565/mo over 15 years and $720/mo over 10. If your lender caps loans under $75,000 below 20 years, budget for the higher payment.
Aircraft loan payments by term and rate
The example is a $200,000 airplane with 15% down, a $170,000 loan. As of September 2026, piston quotes generally run from about 7% to 10%. The table uses 7.00%, 7.75% and 8.50% and shows total interest under each payment.
| Term | 7.00% APR | 7.75% APR | 8.50% APR |
|---|---|---|---|
| 5 years (60 mo) | $3,366/mo $31,972 interest | $3,427/mo $35,601 interest | $3,488/mo $39,269 interest |
| 7 years (84 mo) | $2,566/mo $45,523 interest | $2,629/mo $50,797 interest | $2,692/mo $56,145 interest |
| 10 years (120 mo) | $1,974/mo $66,861 interest | $2,040/mo $74,822 interest | $2,108/mo $82,931 interest |
| 12 years (144 mo) | $1,748/mo $81,748 interest | $1,817/mo $91,640 interest | $1,887/mo $101,742 interest |
| 15 years (180 mo) | $1,528/mo $105,041 interest | $1,600/mo $118,030 interest | $1,674/mo $131,330 interest |
| 20 years (240 mo) | $1,318/mo $146,322 interest | $1,396/mo $164,947 interest | $1,475/mo $184,072 interest |
Loan amount $170,000. Principal and interest only; excludes insurance, taxes and fees. Illustrative, not a quote.
Total interest and principal by term at 7.75%
| Term | Payment | Total interest | Interest as % of loan | Principal paid in year 1 | Balance after 5 years |
|---|---|---|---|---|---|
| 5 years | $3,427 | $35,601 | 21% | $28,960 | $0 |
| 7 years | $2,629 | $50,797 | 30% | $19,034 | $58,265 |
| 10 years | $2,040 | $74,822 | 44% | $11,718 | $101,215 |
| 12 years | $1,817 | $91,640 | 54% | $8,942 | $117,511 |
| 15 years | $1,600 | $118,030 | 69% | $6,246 | $133,336 |
| 20 years | $1,396 | $164,947 | 97% | $3,702 | $148,268 |
Going from 10 to 20 years lowers the payment by $645 a month but more than doubles total interest, from $74,822 to $164,947. The year-1 principal column shows why: on a 20-year loan, only $3,702 of the first year's $16,747 in payments reduces the balance.
What each extra five years buys you
Stretching the term has diminishing returns. Each additional five years buys less monthly relief and costs more interest than the last:
| Stretch | Monthly payment drops by | Total interest rises by | Lifetime interest per $1 of monthly relief |
|---|---|---|---|
| 5 → 10 years | $1,387 | $39,221 | $28 |
| 10 → 15 years | $440 | $43,209 | $98 |
| 15 → 20 years | $205 | $46,917 | $229 |
Moving from 15 to 20 years on this loan saves $205 a month and costs $46,917 of added interest. If $205 a month is the difference between owning comfortably and not, that may be worth it. If it isn't, the 15-year term is the better deal.
Fit the term to the whole ownership budget
The loan payment is only one line of the budget. Insurance, hangar or tiedown, fuel, the annual inspection and an engine reserve all come on top. For example, BWI reports 2026 premiums of about $1,200–$2,500 a year for an experienced private owner of a Cessna 172 with an $80,000–$150,000 hull, and 100LL averaged $7.24 a gallon nationally in late September 2026 (AirNav). A term that fits the payment but leaves nothing for a surprise cylinder or avionics failure is too short. A term chosen only to afford more airplane than the budget supports is too long. The operating cost breakdown helps size the rest of the budget.
Term choices for common situations
- First-time owner: a moderate term (often 15 years on a single) keeps the required payment manageable while you learn the real operating costs. If the note allows penalty-free prepayment, you can shorten it later with extra principal.
- Planning to retire or change missions within 10 years: favor a term that ends, or leaves solid equity, by then.
- Older airframe or run-out engine: expect a shorter maximum from the lender, and keep the term inside the engine's remaining time.
- Business use: the term affects cash flow, not the depreciation schedule. Model both with your CPA.
How loan term interacts with depreciation and equity
Your equity is the airplane's value minus the loan balance. You control the balance side through the term; the market controls the value side. Here is equity after five years on the $170,000 loan at 7.75%, if the airplane holds its $200,000 value or drops 15%. The 15% drop is an illustration, not a forecast.
| Term | Balance after 5 years | Equity if value holds ($200,000) | Equity if value falls 15% ($170,000) |
|---|---|---|---|
| 10 years | $101,215 | $98,785 | $68,785 |
| 15 years | $133,336 | $66,664 | $36,664 |
| 20 years | $148,268 | $51,732 | $21,732 |
What this means in practice:
- If you may sell or trade up within about five years, a shorter term or larger down payment protects the equity you'll need for the next airplane.
- Engine time moves value. On an older piston aircraft, value tends to fall as the engine approaches TBO and recover after an overhaul. A term that runs past the engine's expected runway means paying down the loan while also funding an overhaul. See SMOH and TBO.
- The market today is not the market at resale. Sandhills reports used piston-single inventory down about 17% year over year as of mid-2026, with asking prices roughly flat. Treat that as the starting point, not a promise.
- Business owners: depreciation for tax purposes follows tax rules, not your loan term. As of September 2026, 100% bonus depreciation is permanent for eligible aircraft acquired after January 19, 2025, subject to the more-than-50% business use test. Confirm with a CPA. See aircraft depreciation and tax.
Want numbers for your specific aircraft?
Share the aircraft and timeline — a financing specialist will come back with rate, term and down-payment options.
Long term plus extra payments: what the flexibility costs
A common approach is to take the longest term for a low required payment, then voluntarily pay the shorter-term amount. If the lender prices both terms the same and the note allows penalty-free prepayment, this costs nothing extra: paying $1,600 on a 20-year loan at 7.75% retires it on the same schedule as a 15-year loan.
If the lender charges more for 20 years, the flexibility has a price. Suppose the 20-year loan is quoted at 8.00% ($1,422/mo required). Paying $1,600 a month retires it in about 186 months, with total interest of about $126,669. A straight 15-year loan at 7.75% costs $118,030. The difference, about $8,638, is what you pay for the option of a lower required payment in a lean month.
Twin-engine example: working within a 10–15-year cap
Twins carry bigger balances over shorter maximum terms. For a $300,000 twin loan at 7.75%:
| Term | Monthly payment | Total interest |
|---|---|---|
| 10 years | $3,600 | $132,038 |
| 12 years | $3,206 | $161,718 |
| 15 years | $2,824 | $208,289 |
Twin owners who need a lower payment than 15 years allows sometimes consider a balloon structure. Read how to evaluate an aircraft balloon loan first.
Decision rules for choosing your term
- Start with the budget. Find the shortest term whose payment still leaves room for insurance, hangar, fuel, the annual and an engine reserve. The affordability calculator helps.
- Match the term to your holding plan. If you expect to sell within five years, favor faster principal paydown.
- Respect the engine. Keep the term inside the engine's expected time to overhaul where you can.
- Get two quotes. Price your preferred term and the next shorter one. If rates differ, run the flexibility math above.
- Check the prepayment clause. A longer term is only flexible if extra principal is penalty-free.
- Remember you can change later. A refinance can shorten or lengthen the term, subject to costs. See how to refinance an aircraft loan.
How this guide differs from related guides
This page is about choosing a term length for a fully amortizing loan. For structures with a lump sum at the end, see aircraft balloon loans. For fixed versus variable pricing, see fixed vs variable aircraft loans. For current rate levels, see understanding aircraft loan rates. Try your own numbers in the loan calculator.
Frequently asked questions
What is the longest term I can get on an aircraft loan?
AOPA Aviation Finance lists 5 to 20 years for single-engine piston aircraft, with 20 years only on loans of $75,000 and above. Multi-engine piston loans top out at 10–15 years. Aircraft built before 1960 may need a shorter term or a larger down payment. Individual lenders set their own limits, so confirm for your airplane.
Is a 15- or 20-year aircraft loan better?
A 20-year term lowers the payment but costs more interest. On $170,000 at 7.75%, 15 years is $1,600 a month with $118,030 of interest; 20 years is $1,396 with $164,947. Choose 20 years only if the lower payment is needed for your budget or reserves, or if you plan to prepay and the lender prices both terms the same.
How does the loan term affect my equity in the airplane?
Shorter terms pay principal faster. After five years on $170,000 at 7.75%, you would still owe $101,215 on a 10-year loan, $133,336 on 15 years and $148,268 on 20 years. If the airplane's value slips, the long-term borrower is the one most likely to owe close to what it is worth at resale.
Do longer aircraft loan terms have higher interest rates?
Sometimes. Some lenders price longer terms higher because their money is at risk for longer, and some price the same across terms. Ask for quotes at two terms side by side. If a 20-year loan carries a higher rate, the flexibility of the lower required payment has a real cost, even if you plan to prepay.
Can I take a long term and pay it off early?
Usually, if the note has no prepayment penalty. Many owners take a longer term for a lower required payment and voluntarily pay more. Confirm the note allows penalty-free partial prepayments, that extra payments go to principal, and whether the longer term costs a higher rate. If it does, a shorter term may be cheaper.
What term should I choose for an older aircraft?
Lenders may require a shorter term or more down payment on aircraft built before 1960, per AOPA. Beyond lender rules, consider the engine: a loan that outlasts the engine’s remaining time to overhaul means paying for the airplane while also funding an overhaul, so consider keeping the term within the engine’s expected runway.