Compare your current business loan with a new offer, including break costs and switching fees.
Enter the balance you would refinance, the rate you pay now, the rate in the new offer, the years left and all the costs of switching. For business loans those costs can include an early repayment fee, a fixed-rate break cost, a discharge fee, the new lender's establishment fee, legal fees for new security documents and PPSR registration.
The calculator works out a level monthly repayment for the remaining term at each rate, the monthly difference, how many months of savings it takes to recover the switching costs, and the saving over the remaining term once costs are deducted. It keeps the same remaining term for both loans so the comparison is like for like.
Worked example (illustrative): $220,000 with 4 years left at 10.2% costs about $5,600 a month; at 8.9% it is about $5,470. The saving of about $135 a month recovers $3,500 of switching costs in roughly 26 months, leaving a saving of about $3,000 over the remaining 48 months.
Limits: it assumes both rates stay fixed for the remaining term and ignores tax. Interest on a business loan is usually deductible, so the after-tax saving is smaller. A fixed-rate break cost is set by the lender at the time you exit; ask for a written figure. See the refinancing worked example.
Worked Examples and Checklists
A worked Australian example of refinancing a high-cost business loan, including early repayment fees, new lender costs, break-even months, term extension traps and tax.
