Refinancing
Why this page existsWhoever moves your loan is usually paid for moving it. The easiest way to make a move look good is to show you a smaller monthly figure, which a longer tenure produces on its own.
MethodBoth sides are amortising monthly rest calculations on the same outstanding balance. Fees are charged against the new loan. The lifetime figure is what leaves your account in total, which is the only comparison that settles it.
A smaller monthly payment is not the same as a saving.
Stretch a loan over more months and the monthly figure falls even if the rate does not improve at all. Sometimes refinancing genuinely saves money. Sometimes it just moves the cost somewhere you are not looking. This works out which one you are being offered.
- Stay
- S$206,062
- Switch
- S$215,853
- Extra if you switch
- S$9,791
The rate an offer has to beat
The question a business owner actually has is not "is this offer any good". It is "how good would an offer have to be". That has an exact answer, and it depends almost entirely on the tenure being offered rather than on the rate. Every figure below is worked out from the balance, rate and switching cost you entered above.
| Tenure offered | Monthly payment | Rate it must beat |
|---|---|---|
| 24 months | S$8,503 | 12.35% |
| 36 months | S$5,668 | 8.33% |
| 48 months | S$4,251 | 6.29% |
| 60 months | S$3,401 | 5.05% |
| 72 months | S$2,834 | 4.22% |
When the fee is larger than the interest you have left
This is the case worth checking before any other. Late in a business loan almost every dollar of the instalment is repaying principal, so the interest still ahead of you can be small. Once the cost of moving is larger than that, no rate any lender in Singapore can quote makes switching cheaper, because there is no longer enough interest left to save. The arithmetic settles it and no negotiation changes it.
The question to ask
Not "what is the new monthly payment". Ask what the total is, over the whole tenure, with every fee counted. If a refinance is genuinely better it will still look better on that number. If someone changes the subject back to the monthly figure, you have your answer.
Enquiry
What happens to thisIt goes straight to the people who handle enquiries here, and it is read by a person. We reply by email. Nothing is shared with a lender until you say so.
Why the number is optionalBecause you should not have to hand over a phone number to ask a question. Give one only if you would rather be called.
Thinking about moving a loan? Send us the numbers
A sentence or two is enough. You will get a straight answer about whether it is worth applying, including when the answer is that it is not.
Or email us directly at [email protected]. Open an email with what you have typed, so nothing is lost.
We are an independent consultancy. We do not lend, and sending this does not apply for anything or commit you to anything.