Loans as Non-Current Liabilities? Discover the Truth (2026)

Have you ever glanced at your financial statements and wondered precisely where your loans fit in? For many Australians, understanding the classification of loans as non-current liabilities can provide greater control over their financial planning. Whether you're managing a business or your personal finances, knowing how loans impact your balance sheet is crucial.

Understanding Loans and Non-Current Liabilities

In the realm of accounting, liabilities are classified as either current or non-current based on their due dates. Loans, specifically, can fall into either category depending on their repayment terms. Non-current liabilities, also known as long-term liabilities, are those that are not due within the next 12 months from the reporting date. This classification includes loans that have a repayment period exceeding one year. Understanding this distinction helps in assessing the financial health of an individual or a business by providing a clearer picture of long-term financial obligations.

Current Market Information on Loan Rates and Options

In 2026, the Australian financial landscape offers a diverse range of loan products with varying interest rates and terms. Here's what you need to know:

Loan Type	Interest Rate Range	Repayment Period
Home Loans	6.49% - 7.99%	Up to 30 years
Personal Loans	7.5% - 12%	Up to 7 years
Car Loans	5.99% - 9.5%	Up to 7 years

These rates can vary significantly based on your financial profile and the lender you choose. With over 83 lenders on our panel, Esteb and Co can help you find a loan that best suits your needs, whether it's for purchasing a home, car, or funding personal projects.

Steps to Classify and Manage Non-Current Loans

Proper classification and management of loans as non-current liabilities involve several steps:

1. Review Loan Agreements: Identify the repayment terms and conditions to determine if the loan qualifies as a non-current liability.
2. Consult with a Financial Advisor: Seek guidance to ensure accurate classification and understand implications on your financial statements.
3. Regular Monitoring: Keep track of payment schedules and any changes to loan terms that might affect their classification.
4. Use Financial Software: Employ accounting software to automate and accurately categorize your liabilities.
5. Plan for Future Payments: Establish a financial plan that accommodates future loan repayments without impacting cash flow negatively.

Tips and Considerations for Managing Non-Current Liabilities

Successfully managing non-current liabilities involves strategic planning and foresight. Here are some expert tips:

• Consider Refinancing: If market conditions change or if you find a better rate, refinancing your loan can reduce your long-term liability costs.
• Build a Reserve Fund: Having a reserve fund can cushion the impact of unexpected financial downturns on your ability to meet long-term obligations.
• Stay Informed: Regularly review financial news and updates to understand how economic changes might affect interest rates and loan terms.
• Utilise Professional Services: Leverage the expertise of mortgage brokers like Esteb and Co to navigate complex loan structures and secure favourable terms.

Frequently Asked Questions

1. What distinguishes a current liability from a non-current liability?
   Current liabilities are obligations due within one year, whereas non-current liabilities are due beyond one year.
2. Can a loan be both a current and non-current liability?
   Yes, the portion of a loan due within the next year is a current liability, while the remainder is a non-current liability.
3. How do interest rate changes affect non-current liabilities?
   Changes in interest rates can affect the cost of servicing non-current liabilities, potentially increasing or decreasing your financial burden.
4. Are there tax implications for non-current liabilities?
   Interest payments on certain loans may be tax-deductible, reducing the overall cost of the liability.
5. How do I choose the right lender for a non-current loan?
   Consider factors such as interest rates, loan terms, and lender reputation. Mortgage brokers like Esteb and Co can help you navigate options from 83+ lenders.
6. What happens if I can't meet my non-current liability payments?
   It's crucial to communicate with your lender to explore options like restructuring or refinancing to manage payments effectively.
7. How often should I review my non-current liabilities?
   Regular reviews, at least annually, are recommended to ensure they align with your financial goals and market conditions.