Refinance / Restructuring
What Is Loan Restructuring?
5 min read- Finance Guide
- Updated 2026
Quick answer
Restructuring can change
3 6 core loan settings
depending on lender policy and borrower circumstances
- Common changes term, repayments, structure
- Used for cash flow or debt fit
- Can include hardship variation
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1300 421 044
Key concepts in loan restructuring
Internal variation
The existing lender may agree to change loan terms without replacing the facility if the new structure fits policy and the borrower can support it
Hardship variation
Where a borrower is experiencing financial difficulty, the lender may agree to reduce, pause or vary repayments for a period or on a longer term basis
Repayment reshaping
Restructuring can involve extending the term, changing repayment frequency, switching part of the debt to interest only, or reorganising multiple debts
Security and conduct
Repayment history, property quality and current debt position still matter because the lender needs to see that the reworked structure is realistic
Loan structure options
Loan restructuring can take different forms depending on whether the goal is better cash flow, temporary relief, debt simplification or a longer term reset of the facility.
Repayment change
Interest only or lower repayments
A lender may allow a temporary move to interest only, reduced repayments or a staged return to normal repayments
Facility shape
Split, consolidate or separate debt
Loans can sometimes be split by purpose, multiple debts can be consolidated, or facilities can be separated to improve clarity and control
Loan term
Extend, reset or re amortise
Extending the term can reduce repayment pressure, while re amortising the balance can reset the repayment path after a period of difficulty
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How lenders assess restructuring
Lenders normally review the following when assessing whether an existing loan can be restructured:
-
01. Current income, liabilities and evidence of changed circumstancesCapacity review
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02. Repayment history and conduct on the current loanExisting performance
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03. Security position, loan balance and whether the proposed structure is sustainableSecurity and fit
Common restructuring issues
Repayments are still not affordable
A restructure only works if the new repayment path is realistic. If the revised amount is still too high, the loan can remain under pressure.
Possible solutions include:
rework the proposed repayment amount using current cash flow- extend the term if policy allows
- consider whether a refinance or asset sale is the more durable fix
The lender will not approve the requested change
Not every restructure fits policy. The lender may reject a request if the new structure is too risky or unsupported by the borrower’s present position.
Possible solutions include:
- provide clearer evidence of income or changed circumstances
- simplify the request to a policy compliant change
- consider a refinance to a more suitable lender if internal restructure is not available
Short term relief does not solve the longer term issue
Temporary payment pauses or reduced repayments can help, but interest may continue to accrue and the debt still needs a workable end position.
Possible solutions include:
- map out what happens when the relief period ends
- review whether debt consolidation or term change is needed
- act early before arrears deepen and options narrow
Steps to restructure a loan
Step
01
Review the current loan, repayments and why the present structure is no longer suitable
Step
02
Gather current income, expense and loan account information
Step
03
Decide whether the goal is lower repayments, a term change, debt consolidation or hardship support
Step
04
Approach the current lender first if an internal restructure may solve the issue
Step
05
Provide supporting documents and agree on the proposed variation or new structure
Step
06
Move to the revised arrangement and review whether it remains suitable over time
Speak with a Property Finance Specialist
Loan restructuring can vary significantly depending on the current lender, repayment history, available equity, borrower cash flow and whether the issue is strategic or hardship related.
A specialist can review the current debt position and help identify whether an internal restructure, hardship arrangement or full refinance is the stronger path.
Speak with a finance specialist about restructuring your loan.
Submit the short form below and a finance specialist can review your current loan, the type of restructure you may need, and which options may realistically be available.
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