I currently have a 1.2 million SBA 7a loan with variable interest rate, currently I am paying 6% after this recent rate hike. If fed raises interest rate by another 4% in the next 2 years, I am looking at paying 10% of interest rate, and this is so high! and that means $4000 of more additional interest payment per month and that will be unsustainable for our small business. I wonder if there is any way for me to get out of it before its too late?

  • Besides paying it off early, or refinancing it? (And really, this is variable rate loans are such a risk.)
    – RonJohn
    May 13 at 5:54
  • Then I guess you will have to pay 10% of interest rate.
    – user253751
    May 13 at 9:05
  • 2
    Yes, the way to get out of a loan is to pay it back - perhaps by taking out a new loan, which is called refinancing.
    – user253751
    May 13 at 9:05
  • 3
    I’m voting to close this question because it is not about personal finance.
    – littleadv
    May 13 at 14:10

1 Answer 1


You can always look for refinancing, but it will not be very cheap either - every bank knows as well as you that rate hikes are potentially coming.

What you experience is the core risk of variable mortgages - the reason they are cheap compared to fixed percentages is that you take the full risk of interest rate increases.
Basically, by taking a variable rate, you gambled on long term low interest, and now you lost.

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