Updated . Educational only — not tax, legal, or lending advice. Confirm figures with your CPA, the state revenue department, and a lender before you close.
Refinance Savings Are Interest Left, Not a Lower Payment
A smaller payment can still be a more expensive loan if the term starts over. To see the difference, run two cases in the calculator.
- Current loan: remaining balance as the price, zero down, the current rate, the months you have left. Note total interest remaining.
- New loan: payoff plus any new fees you will finance, as the price. New rate, new term, cash fees you will not finance added in your head. Note total interest plus those fees.
Refinance when case 2 costs less in interest and fees and the payment still fits, or when you are buying out a balloon you have planned for. Do not refinance only to lower this month’s payment by stretching a piston past the lender’s age limit. The decision guide is when refinancing is worth it. Balloon maturity is its own page.
Questions buyers actually ask
Are there prepayment penalties?
Many aircraft loans have none. Yours might. Read the note before you pay for an appraisal.
Will the lender use my original purchase price?
No. They use today’s value and the payoff. If the payoff is above their maximum advance, you bring cash.