Whether you’re upgrading a fleet of excavators, investing in manufacturing machinery, or purchasing your first commercial vehicle, understanding equipment loan interest rates is one of the most important steps you can take before signing any finance agreement. In Australia, rates can vary significantly between lenders, loan structures, and borrower profiles — so taking the time to compare could save your business thousands over the life of your loan.
Our free equipment loan calculator helps you estimate your repayments in seconds. Simply enter your loan amount, preferred term, and interest rate to see a clear breakdown of monthly costs, total interest payable, and how different rate scenarios affect your bottom line. It’s designed to give you the confidence to negotiate smarter and choose the finance structure that genuinely works for your cash flow.
What Is the Average Interest Rate on Equipment Loans in Australia?
As of early 2026, the average interest rate on equipment loans in Australia sits within a range of approximately 6.50% to 11.00% p.a. for secured finance. Where you land within that range depends on your lender, credit profile, business history, and the type of asset being financed. Prime borrowers with strong financials and an established trading record can typically access equipment finance rates at the lower end, while newer businesses or those with impaired credit may receive higher offers.
Several factors have shaped the current rate environment. The Reserve Bank of Australia raised the cash rate to 3.85% in February 2026 after a period of easing in 2025, which has pushed borrowing costs slightly higher across the board. Despite this, equipment loans remain one of the most affordable forms of business finance because they are typically secured against the asset itself — reducing lender risk and keeping rates competitive compared to unsecured alternatives.
Because rates differ so widely between providers, comparing offers from multiple lenders is essential. Even a 0.5% difference on a $100,000 machinery loan interest rate over five years can mean hundreds of dollars in savings each year. That’s why using an equipment loan repayment calculator before you commit is such a practical first step.
How Do I Calculate Equipment Loan Repayments?
The easiest way to calculate equipment loan repayments is to use our free equipment loan calculator at the top of this page. It gives you an instant estimate based on your loan amount, interest rate, term length, and any optional balloon payment — so you can see exactly what your finance will cost before you apply.
Enter Your Loan Details
Start by entering the total finance amount — this is typically the full purchase price of the equipment, as most lenders will finance up to 100% of the asset value (including GST). Then select your preferred loan term, which usually ranges from one to seven years for standard equipment finance.
Adjust the Interest Rate
Input the rate you’ve been quoted, or try a range of rates to see how different scenarios affect your repayments. If you’re comparing multiple lender offers, our machinery loan calculator makes it easy to see the real cost difference side by side. You can also factor in an optional balloon or residual payment if your finance structure includes one — this will lower your regular repayments but increase total interest paid.
Review Your Repayment Breakdown
The calculator instantly shows your estimated monthly repayment, the total interest cost over the loan term, and a clear equipment loan amortization schedule so you can see exactly how your balance reduces over time. This transparency helps you plan your cash flow with confidence and avoid unexpected costs down the track.
What Factors Affect Equipment Finance Rates?
Understanding what drives equipment loan rates Australia can put you in a stronger negotiating position. Lenders consider a combination of borrower-specific factors and broader market conditions when setting rates. Your credit score, time in business, annual turnover, and existing debt obligations all play a role — as does the type of asset being financed. Newer, mainstream equipment such as trucks, excavators, and CNC machines typically attract lower rates than older or highly specialised assets.
The structure of your finances also matters. Chattel mortgages and commercial hire purchase agreements generally offer the lowest rates because you take ownership of the asset from day one, giving the lender strong security. Finance leases and rent-to-own arrangements may carry slightly higher rates. Choosing a fixed rate locks in your repayments for the life of the loan, which is valuable for budgeting — and fixed rates are by far the most common structure for equipment finance in Australia.
Finally, working with a specialist finance broker gives you access to a wider panel of lenders, including major banks and non-bank financiers who may offer more competitive pricing than going direct. At Unconditional Finance, we negotiate on your behalf to secure the best equipment loan rates available for your specific circumstances.
Why Compare Equipment Loan Interest Rates Before You Apply?
Taking out equipment finance is a significant business decision, and the interest rate you accept will directly impact your profitability for years to come. Even small differences in the average equipment loan interest rate between lenders can add up to substantial savings — or unnecessary costs — over a three to five-year term. Comparing equipment loan rates today, before you commit, ensures you’re making an informed choice rather than accepting the first offer on the table.
Beyond the rate itself, it’s worth examining the full cost of the loan, including establishment fees, ongoing account fees, and early repayment charges. In some cases, businesses may also want to consider how equipment finance costs are treated at tax time, as interest and fees can vary depending on the structure of the agreement and individual circumstances, including potential business loan tax deductions. Our calculator helps you estimate repayments and compare different rate scenarios more clearly. And because every business is different, speaking with a specialist can help you identify the loan structure, term length, and repayment frequency that aligns with your revenue cycle — whether that’s monthly, quarterly, or seasonal.
Ready to find your best rate? Use our free equipment loan calculator above to estimate your repayments, then contact the team at Unconditional Finance to compare offers from our panel of 40+ lenders. We’ll help you secure competitive equipment finance rates tailored to your business — with fast approvals and no obligation.
Disclaimer: The information provided is general in nature and does not take into account your personal objectives, financial situation or needs. Lending criteria, policies and assessment processes vary between lenders and may change at any time without notice. You should consider whether this information is appropriate for your circumstances and seek independent professional advice where necessary.
Frequently Asked Questions (FAQs)
In 2026, the average equipment loan interest rate in Australia ranges from approximately 6.50% to 11.00% p.a. for secured finance. The rate you’re offered depends on your credit profile, time in business, the age and type of equipment, and which lender you apply with. Borrowers with strong financials and mainstream assets like trucks or earthmoving machinery will generally access rates at the lower end of the range. Working with a broker like Unconditional Finance can help you compare across 40+ lenders to find the most competitive rate for your situation.
You can calculate equipment loan repayments using our free equipment loan repayment calculator above. Enter your total loan amount, the interest rate, your preferred loan term (typically one to seven years), and an optional balloon payment. The calculator will instantly show your estimated monthly repayment, total interest payable, and a full amortization breakdown — helping you understand the true cost of your finance before you apply.
The main factors that affect equipment finance rates include your business credit score, annual turnover, length of trading history, existing debts, and the type of asset being purchased. Newer, high-value equipment generally qualifies for lower rates because it holds its value as security. The loan structure also matters — chattel mortgages and hire purchase agreements typically offer the lowest rates, while leasing and rent-to-own arrangements may be slightly higher. Broader economic conditions, including the RBA cash rate, also influence the rates lenders offer.