In agricultural finance, not every improvement requires a refinance.
Sometimes, the smartest move is a rate conversion—a targeted adjustment that aligns an existing loan with current market conditions without disrupting the broader structure of the financing.
At Ag Lending Group, we routinely help clients evaluate whether a rate conversion makes sense and, when appropriate, work with lenders to execute it for a small conversion fee—often saving meaningful interest without the cost or complexity of a full refinance.
A rate conversion is a change to the interest rate on an existing loan without replacing the loan entirely.
Unlike a refinance, a rate conversion:
Keeps the original loan in place
Avoids new appraisals or full underwriting in many cases
Preserves existing terms, structure, and documentation
Requires a small conversion or advisory fee, rather than full closing costs
It’s a practical option when the market moves in your favor.
Rate conversions are most effective when:
Market rates have declined since closing
The existing loan structure still fits the operation
The borrower’s credit and financials remain stable
The lender allows rate adjustments within the loan program
In these situations, a rate conversation can result in immediate savings with minimal disruption.
The conversion fee is typically modest compared to:
Full refinance closing costs
Legal, appraisal, and title expenses
Time and operational disruption
For many borrowers, a small upfront fee can translate into:
Lower interest expense
Improved monthly cash flow
Faster break-even compared to refinancing
The key is knowing when the math works.
| Rate Conversion | Refinance |
|---|---|
| Keeps existing loan | Replaces loan entirely |
| Minimal documentation | Full underwriting |
| No new appraisal (often) | Appraisal required |
| Small conversion fee | Full closing costs |
| Faster execution | Longer timeline |
Both tools have their place. The goal is choosing the one that best fits the situation.
Not every loan qualifies for a rate conversion—and not every rate drop should trigger action.
Our role is to:
Monitor market movement
Review existing loan structures
Have informed conversations with lenders
Run the numbers before recommending action
Sometimes the answer is a refinance. Sometimes it’s a rate conversion. And sometimes it’s doing nothing at all.
In a recent case, we reviewed an existing client’s loan after market rates declined. For a small conversion fee, we worked with the lender to reduce the interest rate by 1%—without refinancing or changing the loan structure.
No disruption.
No extended timeline.
Just a proactive adjustment that improved cash flow.
Rate conversions are one of the most underutilized tools in agricultural finance.
When used appropriately, they offer a cost-effective way to respond to market changes and protect long-term cash flow—without taking on unnecessary complexity.
At Ag Lending Group, we focus on identifying the right solution at the right time, whether that’s a refinance, a rate conversion, or staying put.
No suits. No ties. No lies.
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