How long before a bank will refinance a private loan? Start the bank file on day one

You’ve taken a short-term private loan, or you’re about to, and the plan is to hand it back to a bank in due course. The question that matters is when. Not “how old does the loan need to be?” but “what does the bank need, and how long does it take to get there?”

Most owners get this backwards. They treat the bank as something to deal with near the end. The ones who repay on time treat it as the second half of the same job and start it in week one.

Is there a waiting period before a bank will refinance a private loan?

No bank we know of publishes a minimum age for a private loan before it will refinance it. Banks assess you, the property and your capacity to repay. The loan’s age isn’t on the checklist.

There is one catch, and it trips people up. Some banks run a fast-track refinance product with its own entry rules. ANZ’s rapid refinance, for example, asks that your “existing business lending facility has been established for a minimum of 12 months”, with 12 months of statements showing the minimum repayment and “no late repayments”. It’s also capped by total borrowings with the bank. A private loan that’s a few weeks or months old can’t meet that test.

That doesn’t close the door. It means your refinance goes through the bank’s standard assessment, which has more steps and takes longer. The practical lesson is simple: don’t plan around a fast track you won’t qualify for.

How long does the bank side really take?

There isn’t an official number. Banks set their own timeframes, and they stretch when the file is incomplete or a valuation is slow.

The most useful published figure is old but worth knowing. Judo Bank’s 2021 SME banking insights report found lenders took 42 days on average to discharge existing loans when small businesses changed lender. That is the payout and security-release step alone, on top of the approval. Treat it as a reminder that a refinance has several moving parts, not as today’s average.

So build your plan on stages, not on a single number:

Stage	What happens	Who can slow it
Application and document collection	You send returns, statements, ID, the private loan details	You
Credit assessment	The bank reviews serviceability, lodgements and conduct	Bank queue, missing documents
Valuation	The bank orders its own valuation of the security	Valuer access, property type
Conditional approval and conditions	Items to satisfy before settlement	You, your accountant
Documents and settlement booking	Signing, payout figure, booking	All parties, including us

Add them up and the sensible assumption is several weeks even when everything goes well. Our exit date check lets you test your planned repayment date against realistic stage times.

What will the bank want to see?

Every bank has its own list, so ask for it in writing on day one. Expect most of these:

• Lodged returns and up-to-date BAS. Overdue lodgements are one of the quickest ways to stall a file.
• A clean tax position. Debt paid or on an arrangement the bank can see. The ATO can pass details of business tax debts of $100,000 or more that are over 90 days overdue to credit bureaus, after a written notice and 28 days to pay or engage with the ATO. Its disclosure criteria explain the process. If that is your situation, sort the arrangement before the bank application, not after.
• Recent business bank statements showing steady trading.
• A valuation of the property. The bank orders its own, so don’t assume it will match ours. Our page on valuations for short-term loans explains why figures differ.
• A payout figure from the private lender, and the reason for the private loan in a sentence or two.
• Conduct on the private loan. Repayments or interest paid when due, no breaches.

If the bank turned you down before the private loan, ask what changed. The bank said no page covers the usual reasons, and most of them need fixing, not waiting.

Already working to a date? Tell us your exit date and see where you stand, and we’ll shape the loan around the bank’s real timeline.

A week-by-week calendar to hold your exit date

Illustrative example. Rounded numbers, no real client.

A Perth distribution business takes a short-term loan secured by a registered second mortgage behind its bank to fund a large stock purchase. The owner wants to be out within about 12 weeks, when a major customer pays and a refinance can replace the loan. The existing bank is open to a larger facility but wants a full review.

Week	What the owner does
1	Loan settles. Owner asks the bank for its refinance checklist in writing and books the accountant.
2	Missing BAS lodged. Returns and statements sent. Bank confirms what it still needs.
3–4	Bank assessment. Valuation ordered and property access arranged.
5–6	Conditional approval. The owner satisfies conditions and asks us for a payout figure.
7–8	Documents issued, signing done, settlement booked with a few days’ margin.
9–12	Buffer. If anything slips, there are still weeks to spare.

Nothing here is fast. The point is the buffer: starting in week one means the bank’s answer arrives around week six, not week eleven. That leaves room for a second route if the answer is no.

When should you start the bank application?

Use this rule of thumb: start when you sign the private loan, and set your exit date for the bank’s slowest realistic timeline, not its quickest.

Three things make the biggest difference:

1. Fix the paperwork before the application. Lodge what’s outstanding. A late BAS found in week four costs more than the same BAS lodged in week one.
2. Ask for a target approval date in writing. If the bank can’t give one, treat that as information and lengthen your plan.
3. Tell the bank what the private loan is for. A loan that funded a purchase or settled a deadline is easy to explain. One that covered a cash shortfall needs the story behind it, and a bank hears it better early.

If you’re going to be tight against the date, our page on caveat loan refinance covers how the handover works in practice.

What does the bank look at on the private loan itself?

Banks read a private loan as evidence, one way or the other. Three questions come up again and again.

Why did you borrow short-term? A loan that settled a premises purchase, bridged a sale or funded a signed contract has an obvious story. One that plugged a gap with no explanation needs one, and a bank hears it better from you than from a bank statement.

Was it conducted well? Interest or repayments paid when due, no default notices, no extensions requested at the last minute. If the loan has been tidy, say so and offer the statements.

What does the bank step into? At refinance the bank takes over a first or second ranking behind the property. Ask early whether it expects a clear title, which other registered interests (including any caveat) need to be removed, and who coordinates the discharge on the day. Sorting that in week six is far better than finding out on settlement morning.

What if the bank takes longer than planned?

It happens, and it’s more manageable than it sounds if you’ve kept the lender informed.

• Ask the bank why. Is it a timing delay, an item you can supply, or a policy problem? The answer decides your next move.
• Keep the private lender in the loop. Telling us two weeks early gives us more to work with than telling us the day before. Extensions and restructures are far easier to arrange with notice.
• Line up a second exit. Another lender, part-repayment from a sale, or money expected from a customer. Our exit strategy guide shows how to put that in writing.
• Don’t let the account drift. Keep payments on time and don’t add new debt mid-application. Banks look at recent behaviour.

For the bigger picture on choosing between the two types of lender, our private lender vs bank page sets out where each fits.

Planning to borrow short-term and walk back to a bank?

That’s what short-term lending is for. If you tell us your exit date and what the bank still needs, we can build the loan around a timeline that works instead of hoping the bank hurries.

Enquiring takes about a minute, and it won’t touch your credit file. We fund loans ourselves, so your details aren’t passed around a crowd of lenders. A real person reads your answers and calls you to talk through the property, the state and the date. Please fill the form in accurately, including your property’s address and how much your bank still holds on it. That’s what lets us suggest the right structure first time.

If you want a feel for the numbers first, try the borrowing room tool. When you’re ready, map your route back to the bank →