Interest rates are rising: what it means for business loan repayments

As interest rates rise, it's a good time to think about what this means for your repayments.

It’s a good time to consider your repayment amount when interest rates rise – get in touch with us if you want to make changes. If you keep your loan repayments the same should rates rise, it’s important to know that you will pay more interest over the life of the loan and may have a higher amount outstanding than you expect at the end of your loan term.

If the interest rate on my business loan increases, will my repayments change?

It depends on the type of loan you have but here’s what to expect:

If you make interest only repayments: the interest charged and your repayment amount will automatically increase.

If you have a fixed rate loan: your repayments stay the same for your fixed period. If your fixed rate loan is expiring soon, consider your repayment amount based on current variable rates.

If you have a variable interest rate loan: your repayment amount won’t change without us letting you know first. The interest charged to your loan account will increase. If you keep your loan repayments the same should rates rise, it’s important to know that you will pay more interest over the life of the loan and may have a higher amount outstanding than you expect at the end of your loan term.

Get in touch with your Relationship Manager or call us on 1800 804 411, Monday-Friday, 7:30am-5:30pm (excluding public holidays) if you’re looking to adjust your repayment amount.

What are the current interest rates?

Take a look at current business loan interest rates.

I have a loan under the SME Recovery Loan Scheme – will my interest rate increase?

Yes, interest rate increases apply to loans under the scheme. 

If it’s reasonable to keep your loan repayments the same, following the increases in interest rates, you will pay more interest over the life of the loan and may have a higher amount outstanding than you expect at the end of your loan term. This may also be the case if you’re still on a repayment holiday, because when your repayment holiday ends your loan will revert to the repayment amount we agreed at the start of your loan.

We will continue to review your business loan(s) and may contact you regarding to make some adjustments to your minimum monthly repayments to help keep you on track and, to repay your business loan within the terms you have chosen. This may include amending your minimum monthly repayment amount at a future date allowed by the terms of your facility.

I have a business overdraft – is this affected?

Overdrafts aren’t set up with regular repayments so there is no change. However, interest charged on the amount of overdraft used may increase as rates increase.

I’m having difficulty making my repayments – what are my options?

Rest assured, we’re here to help if you’re having trouble making your repayments. Get in touch with your Relationship Manager as soon as possible or call us on 1800 804 411, Monday-Friday, 7:30am-5:30pm (excluding public holidays). We’ll talk you through your options.

To sum up

We won’t make any changes to your repayment amount without letting you know first but now could be a good time to think about your repayment amount. If you keep your loan repayments the same even when rates rise, you will pay more interest over the life of the loan and you may have a higher amount outstanding than you expect at the end of your loan term.