Quick answer
When a private or short-term loan reaches its maturity date and the lender will not extend, the borrower faces default interest and possible enforcement. A new property-secured loan can repay it before or soon after maturity, giving more time for the original exit, such as a sale or bank refinance, provided there is still enough equity and the exit remains credible.
Key points
- Repays a maturing private loan when no extension is offered
- Avoids default interest and enforcement costs
- Gives time for the original exit to complete
- Requires sufficient equity after the payout figure
- Start before the maturity date for the best options
Maturity dates arrive faster than exits
Private loans are written with a term that matches an expected exit. When the sale campaign runs long, the bank refinance stalls, or a planning approval takes months longer, the maturity date can arrive before the exit does. Some lenders will extend. Others will not, because of their own funding cycle, their maximum term policy or a change in their view of the deal.
A loan that passes maturity unpaid can attract default interest and fees and may lead to enforcement. The cost of acting late is high.
Refinancing a maturing private loan
A new secured loan can repay the existing lender on or before the maturity date. The new lender assesses the property, the full payout figure and, critically, the exit. If the original exit is still credible, simply delayed, a refinance buys the time it needs.
| What the new lender needs | Why |
|---|---|
| The current payout figure, including any default amounts | Sets the minimum loan |
| The property’s current position | Confirms equity remains after the payout |
| Why the exit slipped | Shows whether the delay is temporary |
| Evidence of progress | Listing, contract, application or approval |
| A realistic new timeline with a buffer | Sets the new term |
No valuation is needed before approval, which helps when the maturity date is close.
Get a refinance assessment before your maturity date to keep every option open.
Start early
The best time to refinance is weeks before maturity, not days after. Starting early lets you compare options calmly, avoids default interest and gives the outgoing lender confidence that it will be repaid on time, which can help if a short extension is needed to complete the refinance.
When the exit itself has changed
Sometimes the delay reveals a bigger problem: the property is worth less than expected, the bank will not refinance at all, or the project’s numbers have changed. In that case, the refinance needs a new exit. That might be a managed sale on your timetable rather than a forced one, or adding another property as security while the original plan is reworked. Our guide on backup exits explains how to rebuild the plan.
An illustrative refinance
Illustrative only. A developer took a twelve-month private loan to hold a site while seeking approval for a small apartment building. The approval process ran four months longer than expected and the lender, closing its fund to new extensions, asked to be repaid at maturity. With the approval now granted and a construction lender engaged, a new private loan repaid the original lender and covered six months of capitalised interest. The construction facility settled five months later and repaid it.
Avoiding the same problem twice
Set the new term with a generous buffer, keep the new lender informed of progress, and track the exit with a simple timeline. The exit strategy timeline can help. Remember that loans with us are flexible and can stay in place if needed, but a realistic plan from the start avoids pressure later.
Questions to ask your current lender
Before you refinance, ask your current lender three things in writing: the exact payout figure on your target settlement date, whether any default interest or fees will apply if settlement falls after maturity, and whether it would agree to a short extension if a refinance is clearly under way. The answers help you choose a settlement date and avoid unnecessary costs.
Comparing an extension with a refinance
If your current lender does offer an extension, compare it with a refinance on total cost over the realistic remaining term, including extension fees, any change in pricing and the legal costs of each option. A refinance has set-up costs, but it may offer a longer runway and more flexible terms. The bridging cost estimator helps put the two side by side.
Signals that an extension is unlikely
Lenders often give hints before they refuse to extend: questions about the exit become more frequent, they ask for updated valuations or financials, or they mention changes to their funding. If you notice these signs, start looking at a refinance immediately rather than waiting for a formal answer. You lose nothing by having a second option ready. Ask a specialist to review the deal on its current numbers so you know whether a refinance is viable before the conversation with your lender becomes urgent. That early view also tells you whether to focus on the existing lender or on the alternative.
Do not wait for the default notice
A maturing loan is a deadline you can see coming. Tell us the payout figure, the maturity date, the property and how the exit has progressed, and a specialist will tell you whether a refinance makes sense. There is no credit check when you first enquire, your details stay with one team, and honest information about the delay helps us set a term that works. Refinance before maturity.
Frequently asked questions
Why would a private lender refuse to extend?
The lender may have its own funding commitments, a policy on maximum terms, concerns about the exit, or simply want its capital back. It does not always mean the deal is unviable.
What happens if my loan passes maturity unpaid?
Depending on the loan terms, default interest and fees can apply and the lender may begin enforcement. Check your documents and act early.
Can I refinance one private loan with another?
Yes, if the property has enough equity to cover the payout figure and costs, and the exit is credible. The new loan repays the old one at settlement.
How do I strengthen my refinance application?
Show progress on the exit: a listing, a sale contract, a refinance application under way, or completed approvals. Explain why the original timeline slipped.
Prefer to start now? Enquire here
About 60 seconds. No credit check when you first enquire, and a secured lending specialist calls you back.