Business loan refinance calculator

When does refinancing a business loan make sense?

Refinancing replaces an existing loan with a new one, usually to cut the rate, lower repayments, consolidate several loans or release equity. It pays off when the savings over the time you'll keep the new loan outweigh the costs of switching. The calculator shows the monthly difference, the total interest on each loan, the net saving after switching costs and the break-even point.

What does it cost to refinance?

• Break costs on a fixed-rate loan, which can be large if rates have fallen since you fixed.
• Early repayment or exit fees on the current loan, common with short-term and factor-rate lenders.
• Discharge and registration fees for removing and registering mortgages.
• New loan fees: establishment, valuation and legal costs.

Ask your current lender for a payout figure before comparing, because it shows exactly what clearing the loan will cost.

Lower repayments or a cheaper loan?

Stretching a loan over a longer term lowers the repayment but can increase the total interest, even at a lower rate. The calculator warns you when the new term is longer than the remaining term on your current loan. If cash flow is the goal, a longer term may still be the right choice. Just make it a deliberate one.

Refinancing several loans into one

Businesses carrying two or three short-term loans often refinance them into a single loan, sometimes secured against property, with one lower repayment. That can end the cycle of daily repayments draining the account. Our guides to unsecured business loans and second mortgages explain the options.

Refinancing a tax debt or a bridging loan

Short-term debt is often refinanced once its job is done. A caveat loan used to clear an ATO debt can move to a cheaper, longer second mortgage. A bridging or private loan can be refinanced to a bank once the business qualifies. Planning that exit from the start keeps the cost of the short-term loan down.