Last updated: • Not financial advice
Why Payment Cadence Matters
Payment timing changes cash‑flow rhythms and interest accrual. Monthly keeps outflows steady and generally reduces total interest. Quarterly concentrates outflows but can align with revenue cycles and simplify reconciliations.
Compounding Mechanics
The per‑period rate shifts with cadence. Interest accrues longer between quarterly payments, which can raise total interest compared to monthly at the same nominal APR.
Examples
Owner‑Flown Piston
Budget smoothing favors monthly payments, easing hangar/insurance seasonality. The difference in total interest may be small but helpful.
Corporate Turboprop
Quarterly matches invoicing cycles and bonus schedules. Pair with a balloon to moderate payment size if needed.
How to Choose
- Map your cash calendar (revenue, insurance, maintenance).
- Model monthly vs quarterly in the calculator; export and compare totals.
- Stress APR ±100–200 bps and consider a refi path if rates fall.
Seasonality and Reserves
Quarterly payers should maintain a cash reserve equal to at least one quarterly payment, plus set‑asides for annual insurance and major maintenance. This cushions timing risk and prevents short‑term borrowing at unfavorable rates.
FAQs
Will my APR change if I pick quarterly?
APR is nominal; compounding mechanics differ. Some lenders may price cadence differently—ask for explicit quotes for each.
Is quarterly harder to get approved?
Usually not. Underwriting cares more about credit, liquidity, and LTV.
Can I switch later?
Some lenders allow a servicing change (fee applies). Others require a refinance. Ask upfront.
Related Articles
External references: FRED interest rates · AOPA Finance · CFPB on APR