How to manage loan repayments when interest

2 min read

Step 1Recalculate the hit

Step 2Protect cash flow

Step 3Talk early

Loan amount (£)

Annual interest rate (%)

Term (months)

Illustrative only. Assumes a fixed rate and equal monthly repayments (annuity). Your actual offer depends on Credicorp’s assessment of your company.

Step 1 — recalculate your new payment

Work out the new monthly figure at the higher rate so you are dealing with facts, not fear. Use the loan repayment calculator below to see the exact change.

Step 2 — protect cash flow first

Tighten affordability: chase overdue invoices, trim discretionary spend, and rebuild a buffer. A rate rise is easier to absorb from a strong cash position.

Step 3 — cut the interest you can

On a daily-accrual facility, sweep spare cash against the balance and draw only what you need. Overpay where it is free to shrink the balance the rate applies to.

Step 4 — talk to your lender before you struggle

If the higher payment strains cash flow, contact the lender early. A capital repayment holiday or restructure arranged in advance beats default interest from a missed payment.

Step 5 — consider fixing or hedging

If further rises would hurt, weigh fixing or a cap for certainty.

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.

Frequently asked questions

What should I do first when rates rise?

Recalculate your new payment so you know the real impact, then protect cash flow. Acting on facts beats reacting to headlines.

Should I contact my lender?

Yes, early — before any payment is at risk. Lenders can often restructure or grant a repayment holiday if you talk to them before you fall behind.

Is it too late to fix once rates have risen?

Fixing after a rise locks in a higher rate, but still gives certainty against further rises. Weigh the cost against your appetite for more volatility.