Key highlights
- Refinancing can lower repayments via a better rate or longer term
- Watch for payout figures, exit fees and any early-termination costs
- A stronger trading history since settlement may unlock sharper pricing
- One application compares many lenders without repeated legwork
Refinancing a machine means replacing your current loan with a new one, usually to cut the monthly repayment through a lower rate, a longer term, or both. Whether it saves you money depends on your remaining balance, any exit costs and the rate you can now access. Overdrive's Simon Kendrick compares more than 80 banks and non-bank lenders on one application, so you can see if refinancing genuinely helps before you make the switch.
Why people refinance a machine
Most owners refinance to ease cash flow. If your original loan was priced when your business was newer, or when rates were higher, you may now qualify for better terms. Extending the remaining term can also reduce each repayment, though it can increase total interest over the life of the loan. Others refinance to consolidate several equipment loans into one manageable payment, or to release equity in a machine they part-own. The right reason for you shapes the structure, so it helps to be clear on whether you are chasing a lower monthly figure, a lower total cost, or freed-up funds.
What determines your new rate
Lenders look at the machine's age and value, how much you still owe, your repayment history and your current trading position. A cleaner track record since you first bought can move you into stronger pricing, while an older or more specialised machine may narrow the field. As a guide, rates start from around 6.55% p.a. for strong, asset-backed deals, with older or cheaper assets, lower-doc files and weaker credit priced higher. All figures are indicative and subject to lender assessment. Comparing lenders matters here because each values used machinery and your situation differently, so the best refinance offer is rarely the first one you find.
Costs to weigh before switching
Refinancing is only worthwhile if the savings outweigh the costs of moving. Ask your current financier for a payout figure and check for early-termination or break costs, since these can absorb some of the benefit. Factor in any establishment fee on the new loan and any change to the term. A simple way to judge it is to compare your total remaining cost now against the total cost of the new arrangement. If you are unsure how the numbers land, a broker can model it with you and confirm whether switching is genuinely worth it.
If your machine repayment feels heavier than it needs to be, a quick comparison can tell you whether refinancing is worth it. Simon Kendrick reviews your payout, current rate and trading position across more than 80 lenders on one application. Reach out for a free, no-obligation assessment, and you will know whether switching genuinely saves you money before you commit to anything.
Frequently Asked Questions
Can I refinance a machine I am still paying off?
Usually yes. The new loan pays out the balance owing on your current one, and you continue with the new lender's terms. The lender will want the machine's current value, your payout figure and your trading details. Whether it saves money depends on the new rate, the term and any exit costs on the existing loan.
Will refinancing reset my loan term?
It can. A new loan often starts a fresh term, which is how repayments drop. That eases monthly cash flow but may raise total interest paid over time. If the goal is a lower overall cost rather than a lower repayment, keeping the term similar and chasing a better rate usually works better.
How old can a machine be to refinance it?
There is no single cut-off, but older machines narrow the number of willing lenders and can attract higher pricing. Lenders often consider the machine's age at the end of the proposed term. Because appetite varies widely, comparing multiple lenders is the practical way to find one comfortable with your machine's age.
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