Originally published in Heartbeat Magazine Spring 2025.
Your go-to resource for navigating agriculture’s financial landscape where our knowledgeable FCS Financial staff addresses some common questions from our members.
I have heard that FCS Financial offers a tool to drop interest rates without refinancing. How do I know if I am eligible?
Stephanie Tyler, Team Leader, Vice President, Ag & Rural Lending
Yes, you’ve heard correctly about our loan conversion option! When interest rates drop, you may be eligible to lower your rate after it’s been locked in for a year. A conversion is different from a refinance. Instead of creating a new loan, we simply lower your existing rate, either to match the lower market rate or by using a shorter-term product. A refinance, on the other hand, is a new loan that requires underwriting, updated appraisals, and title work, which can lead to significant fees. With a conversion, your existing loan number, payment setup, and frequency all stay the same.
We do charge a conversion fee, but it’s typically less than your first year’s savings, compounded over the remaining loan term. Plus, you can use the conversion option multiple times throughout your loan term, once a year after your rate is locked. The process is straightforward: discuss it with your loan officer, and if it’s eligible and beneficial, you’ll sign a simple form, and the new rate takes effect the first day of the following month.
While our loan officers look for conversion opportunities, we do encourage you to call your office after your loan has been locked for a year. Consider setting a yearly reminder after closing or converting a loan to check for potential savings.
