How to Refinance a Commercial Loan

Obtaining a commercial refinance loan is a good way to save on loan interest costs. Refinancing a commercial loan involves several steps that you need to take in order to secure a more favorable loan. These steps include researching lenders, comparing loan rates and completing a loan application. Following these steps will help you refinance your commercial loan. They are basic steps that should be incorporated in your process as you seek refinancing.

Step 1: Research Lenders

Use the internet, or call local lenders for refinance loan terms. Be sure to contact at least three lenders and take notes about their requirement needs, rates and costs.

You will also want to ask each lender about their experience with your loan and any refinancing restrictions or limitations. Answering these questions should help you choose the best lender for your particular commercial loan refinance.

Step 2: Compare Loan Rates
You should compare rates between the lenders that you choose. Be careful when choosing the loan rate. Do not simply go with the lowest rate, compare all loan terms. Pay careful attention to introductory rates and fees. For example, rates that resets after a period, say 6 months, to a higher interest rate may not be a good program, even if the initial rate is very low.  You may be better served with a two year rate to keep from a growing rates because your interest cost savings could be reduced or eliminated.

Step 3: Complete an Application

Apply with the lender that meets your requirements and provides the best rates and terms. You should understand all of the loan requirements before applying and ask appropriate questions. Having a good understanding of the loans rates, terms and conditions will reduce misunderstandings and confusions later on when the commercial loan refinance has been approved.

These steps should help you with obtaining a commercial loan refinance. You should understand the requirements of the lender that you select and choose a loan that meets your needs. The more work that you do to select a lender will pay off in the end with a better commercial loan and lower cost for your business.