Change Loan Term? Here's How to Regain Control (2026)
Stuck with a long loan? Discover how to change terms easily. Regain control of your finances today. Explore proven strategies now!
Are you feeling overwhelmed by your current loan term or simply considering a change to better align with your financial goals? Whether you're looking to reduce your monthly repayments or pay off your loan sooner, altering your loan term could be the solution. With the right knowledge and guidance, you can navigate this decision to suit your needs. Let's explore what it means to change your loan term and how it can impact your financial future.
Understanding Loan Terms
Before diving into the process of changing your loan term, it's crucial to understand what a loan term is. A loan term is the length of time you have to repay the borrowed amount. It can vary significantly based on the type of loan and the lender's policies. For instance, home loans in Australia typically range from 25 to 30 years, while personal loans might span from 2 to 7 years. The term you choose affects both your monthly repayment amount and the total interest you'll pay over the life of the loan.
Current Rates and Options
In 2026, the Australian lending market offers a variety of options for adjusting loan terms. With interest rates fluctuating between 6.49% and 12%, it's important to evaluate your current rate against market offerings. Changing your loan term can impact your interest rate, so understanding your options is key.
| Lender | Interest Rate | Loan Term Options |
|---|---|---|
| Lender A | 6.49% - 8% | 15, 20, 25, 30 years |
| Lender B | 7% - 9.5% | 10, 15, 20, 25 years |
| Lender C | 8% - 12% | 5, 10, 15, 20 years |
With access to over 83 lenders, Esteb and Co can help you find a tailored solution that meets your needs. Whether you're aiming for lower monthly repayments or a shorter loan duration, we have options to match your financial situation.
Steps to Change Your Loan Term
Changing your loan term involves several steps. Here's a clear guide to help you through the process:
- Assess Your Current Financial Situation: Evaluate your income, expenses, and financial goals. Determine if you can afford higher repayments or if you need to reduce them.
- Research Lenders: Look for lenders that offer flexible loan terms. Consider interest rates, fees, and the overall terms of the loan.
- Consult Your Current Lender: Contact your existing lender to discuss the possibility of altering your loan term. They may offer a competitive rate to retain your business.
- Compare Offers: Use comparison tools or consult with a mortgage broker like Esteb and Co to find the best offer from multiple lenders.
- Submit an Application: Once you've chosen a lender, submit an application to change your loan term. Be prepared to provide documentation of your financial situation.
- Review the New Loan Agreement: Carefully review the new loan terms, including the repayment schedule and any changes in interest rates.
- Finalize the Change: Sign the agreement and begin making repayments according to the new terms.
Tips and Considerations
When considering a change in your loan term, keep these expert tips in mind:
- Understand the Impact on Interest: Shortening your loan term can save you money on interest, but it will increase your monthly repayments. Conversely, extending your term reduces monthly payments but increases total interest paid.
- Consider Fees: Some lenders may charge fees for altering your loan term. Ensure you understand these costs before making a decision.
- Evaluate Your Long-Term Goals: Align your loan term with your long-term financial goals. If you plan to sell your property soon, a shorter loan term may be beneficial.
- Stay Informed: Keep up to date with market trends and interest rate changes. This knowledge can help you make informed decisions about your loan.
- Seek Professional Advice: Consult with a mortgage broker like Esteb and Co to explore the best options from a wide range of lenders.
Frequently Asked Questions
- Can I change my loan term without refinancing?
- Yes, some lenders allow you to adjust your loan term without a full refinance. However, terms and conditions vary, so check with your lender.
- Will changing my loan term affect my credit score?
- Generally, changing your loan term itself shouldn't impact your credit score, but applying for a new loan or refinancing might temporarily affect it.
- How often can I change my loan term?
- This depends on your lender's policies. Some may allow frequent changes, while others might restrict it to once or twice over the loan's life.
- Is it better to shorten or extend my loan term?
- It depends on your financial situation. Shortening saves on interest but raises payments, while extending lowers payments but increases total interest.
- Do I need to pay a fee to change my loan term?
- Some lenders may charge a fee for altering your loan term. Always check with your lender about any potential costs involved.
- Can Esteb and Co help me change my loan term?
- Absolutely. With access to over 83 lenders, Esteb and Co can assist in finding the best solution to meet your needs.
- What documentation will I need to change my loan term?
- You'll typically need to provide proof of income, expenses, and possibly an updated property valuation. Check with your lender for specific requirements.
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With direct experience helping Australians secure home loans, car finance, and business funding, Ricky founded Esteb and Co to bring transparency and technology to mortgage broking.