Updated . Educational only — not tax, legal, or lending advice. Confirm figures with your CPA, the state revenue department, and a lender before you close.
Three Exits, Three Different Files
You leave an aircraft loan by paying it, replacing it, or rewriting the payment with the same lender. Balloon maturity is covered on balloon refinance. Whether a new loan saves interest is on when refinancing is worth it. This page is which door you are actually opening.
Sell
The buyer’s lender or cash pays your payoff. You need a payoff letter good through the closing date, a title that matches the registration, and logbooks that will survive their prebuy. If the sale price will not clear the loan, you bring the difference in cash. Escrow should not disburse to you until your lien release is in process. See title and escrow.
Refinance
A new lender pays off the old one and files a new security agreement. They appraise the aircraft again. They do not inherit your old advance rate. If today’s value will not support the payoff, the refinance does not exist unless you add cash.
Reamortize
The same lender changes the payment or the remaining term without a new loan. Some will do this after extra principal. Many will not. Ask before you assume extra payments “recalculate the bill.” The note controls. Model both a shorter term at the same payment and a lower payment at a longer term in the calculator. The second one often costs more interest.
Questions buyers actually ask
Can the buyer assume my loan?
Only if the note allows assumption and the lender underwrites the buyer. Most aircraft notes do not allow it. Plan on a payoff.
Is a recast a refinance?
No. A recast stays with the same lender and usually the same lien. A refinance is a new loan and a new filing.