Can a Trust Take a Loan? Discover Fast Solutions (2026)

For many Australians, trusts are a strategic tool for wealth management, asset protection, and tax planning. However, when it comes to financing via loans, the landscape can be confusing. Whether you're managing a family trust or a business trust, understanding how a trust can take out a loan can be crucial for leveraging your assets effectively. If you're wondering how to navigate this complex area, you're not alone. Let's delve into the intricacies of trusts and loans to help you make informed decisions.

Understanding Trusts and Loans

A trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries. Trusts are often used for estate planning, protecting assets, and managing investments. But when it comes to borrowing, trusts can also act as borrowers, provided they meet specific criteria set by lenders.

The ability of a trust to take out a loan depends largely on the trust deed, which outlines the powers of the trustee. It's crucial to ensure that the trust deed explicitly allows for borrowing. Without this provision, lenders are unlikely to approve a loan application.

Loan Options and Requirements for Trusts

When considering a loan for a trust, there are various options available, each with its own set of requirements:

• Property Loans: These are common for trusts looking to invest in real estate. Lenders typically require a detailed assessment of the trust's financial health, including asset valuations and income statements.
• Business Loans: Trusts that operate businesses can apply for business loans, which may require a solid business plan and financial projections.
• Personal Loans: While less common, some trustees may seek personal loans for the trust, although these often come with higher interest rates due to potential risks.

Interest rates for trust loans in 2026 typically range from 6.49% to 12%, depending on the type of loan and the trust's financial standing. Eligibility usually requires a strong credit history, sufficient income or assets, and a clear purpose for the loan.

Loan Type	Interest Rate	Key Requirements
Property Loan	6.49% - 9%	Asset valuations, income statements
Business Loan	7% - 10.5%	Business plan, financial projections
Personal Loan	8% - 12%	Credit history, income proof

Steps to Secure a Loan for Your Trust

Securing a loan for a trust involves several steps:

1. Review the Trust Deed: Ensure the deed allows for borrowing and that all trustees agree to the loan application.
2. Assess the Trust's Financial Position: Gather all necessary financial documents, including income statements and asset valuations.
3. Choose the Right Loan Type: Determine the purpose of the loan and select the most suitable product.
4. Consult a Mortgage Broker: Engage with a mortgage broker like Esteb and Co, who can guide you through the process and offer access to over 83 lenders.
5. Submit the Application: Complete the application process with all required documentation and submit it to your chosen lender.

Tips and Considerations

Here are some expert tips to consider when taking a loan for a trust:

• Understand Tax Implications: Loans taken by trusts may have different tax implications, so it's wise to consult a tax advisor.
• Maintain Clear Records: Keeping accurate records is essential for compliance and future financing opportunities.
• Regularly Review the Trust Deed: As circumstances change, ensure the trust deed is updated to reflect current powers and intentions.
• Consider Interest Rates: With fluctuating rates, consider locking in a fixed rate if you anticipate rising interest costs.

Frequently Asked Questions

Can any trust apply for a loan?
Not all trusts can apply for loans. The trust deed must explicitly permit borrowing, and the trust must meet the lender's criteria.

What documents are required for a trust loan application?
Typically, you need the trust deed, financial statements, identification for trustees, and details of the loan purpose.

Are interest rates higher for trust loans?
Interest rates can be higher due to the perceived risk, but they vary based on the trust's financial health and the type of loan.

How does a trust's credit history impact loan approval?
A strong credit history can significantly improve a trust's chances of securing a loan with favourable terms.

Can Esteb and Co help with trust loans?
Yes, Esteb and Co can assist you in finding the right loan by accessing their panel of 83+ lenders, ensuring you get competitive rates and terms.