Marl Carter, Oklahoma City, has worked with farm and ranch families in Oklahoma, Kansas, Texas and several of the other surrounding states for more than 25 years, in the financing of farm and ranch land.

He states it is important to stay knowledgeable of the various types of loans available.

Long-term borrowing has changed considerably over the past several years. There used to be a variable rate loan and another type loan, with the rate fixed for 20 years or longer. Today, there still are variable rates; however, fixed rates are typically available for one, three, five, ten and 20-year periods. The borrower generally has the right to renegotiate the rate for another term on the shorter rate locked periods and the loans are set up with a 15 to 25-year amortization. Many of the loans Carter has made have been "tailor-made" for the customer's particular circumstances. For instance, if a person plans to retire in five years, he can fix the interest rate for only a five-year period to avoid the risk of a prepayment charge for early payoff. He also has a very popular type of loan where the rate can be locked for 10 years. Twice a year, the borrower has the option to pay the loan in full, without a prepayment charge beginning with the second year. Further, the annual payments on this loan can be spread out over 25 years.

A fixed rate loan can eliminate the risk of an increase in borrower's interest rate. Further, it can possibly decrease the rate of interest and lower the required annual payment. Consider converting a variable rate loan to a fixed rate. Debt consolidation could accomplish several things for an operation, in addition to leaving only one loan, one lender and one annual payment. Loans are funded through very financially sound agricultural lenders.

Borrowers should become familiar with the various types of long-term loans now available. There may be a loan "tailor-made" for a person's operation. If a person will be owing money for the next 10 to 15 years, make it a priority to become knowledgeable of the various loan types.

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