We have a wide range of loan solutions to choose from including:
Standard Variable Loan
The most popular choice of loan in Australia due to the flexibility and range of
features which is generally in exchange for a slightly higher than a basic variable
loan rate. Features such as low fees, offset facility, redraw facility and additional
repayments – all of which can assist you in reducing the overall term and cost to
your loan. The interest rate is not locked in as it moves up and down in line with
the Reserve Bank of Australia's interest
rate fluctuations.
Advantages:
- Flexibility
- Lump-sum payments can be made without incurring a penalty.
- If interest rates fall, your repayments
- Often offer extra features.
Disadvantages:
- If interest rates rise your repayments will rise.
- Extra features mean you pay a higher interest rate than a basic variable rate.
Basic Variable Loan
This loan offers fewer features and flexibility than a standard variable loan however
this is offset by providing borrowers with lower interest rates. If you require
extra flexibility within this type of loan, you often have the option to pay for
any additional features required, although this will depend on the loan provider.
Interest rates and repayments will vary throughout the loan term.
Advantages:
- Lower interest rates than the standard variable loans.
- Lower repayments.
- If interest rates fall, your repayments will fall.
Disadvantages:
- Usually less flexibility than other variable loans.
- Offer less features.
- If interest rates rise your repayments will rise.
Intro Rate 'Honeymoon' Loan
An introductory or honeymoon rate loan offers a low interest rate for an initial
period of time. After the initial period has finished the loan will revert to the
standard variable rate unless you have negotiated something different with your
lender.The rate can be fixed, variable or capped.
Advantages:
- Usually the lowest rates on the market.
- By making extra payments during the initial period, borrowers can substantially
reduce the principal.
Disadvantages:
- Payments will increase after initial period.
- Most lenders charge penalties if you discharge the loan within the first 3-4 years.
Fixed Rate Loan
Fixed rate products are gaining popularity at the moment due to the recent drop
in interest rates. The interest rate is fixed for a specified period, which can
be between six months and ten years. This loan gives you the certainty of knowing
what your monthly repayments will be and peace of mind knowing the repayments won’t
rise, however you won’t benefit if rates go down.
Advantages:
- Certainty of repayments - if interest rates rise your repayments won’t.
- The interest rate is generally cheaper than more flexible products.
Disadvantages:
- Reduced flexibility.
- Extra repayments are limited or may incur additional costs.
100% Offset Loan Account
A loan that allows you to decrease your interest charges by combining all your banking
transactions with your loan. Your income is deposited into an offset account that
is directly linked to your loan. As you need your money, you can withdraw it via
EFTPOS, ATM, linked credit card or cheque book.Any balance in the offset account
is then 100% 'offset' against your loan. This reduces the amount of interest
you have to repay, making your money work harder for you.
Advantages:
- Can save you substantial amount of interest if used correctly.
- Operates like a normal transaction account and has a chequebook, ATM card, etc.
Disadvantages:
- May have higher monthly fees.
- May require a minimum balance in the account.
- May be a slightly higher interest rate.
- Requires disciplined borrowers.
Line of Credit Loan
This loan provides you with access to the equity in your home or investment properties.You
are given a credit limit secured against your property, and when you need funds,
you draw against that limit.As you pay back the loan, the money becomes available
to you again. The interest rate on a line of credit loan is usually a variable rate
and repayments are interest only.
Advantages:
- You have ready access to money as long as the balance doesn’t exceed the approved
limit.
- You can make repayments as you see fit.
- Rates are generally lower than a personal loan or credit card.
Disadvantages:
- Unless care is shown it is possible to reduce the equity you have built in your
home.
- Requires disciplined borrowers to ensure that overtime the principal of the loan
is reduced.
- Can cause confusion at tax time if funds are drawn for personal purposes.
Low-Doc & Credit Impaired Loans
This loan is suited to investors or self-employed borrowers who do not meet the
'standard' lending criteria. This may include those with an impaired credit
history, those who are unable to provide the required documentation in support of
their loan application, or those who wish to borrow more than 100% of the property
value.Rather than produce payslips, tax returns or other proof of income, the lender
asks you state your income - a process called self-verification.
Advantages:
- Simple income declaration form.
- No tax returns or financial statements.
- Can have features such as redraw, line of credit, variable or fixed rates, principal
and interest or interest only.
Disadvantages:
- Generally a higher interest rate than standard loans.
- You will pay additional fees and charges, including ‘risk fees’.
Construction Loans
This loan provides funding for building property or extensive renovations in a way
that has you pay the lowest repayments during construction.The loan requires a fixed
price building contract from a registered builder.The loan is drawn down in instalments
to pay the builder. During construction the repayments are usually interest only,
payable on only the amount of the loan that has been drawn down. Once the building
is completed, the loan will then convert to whatever loan you have negotiated with
your lender.
Advantages:
- Competitive variable interest rates.
- Facility to draw money when necessary whilst building.
- Interest only payments during the building period.
- Additional payments can be made.
Disadvantages:
- Requires a fixed price building contract leaving little room for change whilst building.
- Some lenders charge a fee for every time you draw money whilst building.
- If interest rates rise your repayments will rise.
- If you are an owner builder, you will be required to present detailed costings including
quotes and all relevant insurances which may be time consuming
Bridging Loans
This is a temporary loan providing financial cover which enables you to build or
buy your new property before you sell your current home.
Advantages:
- You can complete the purchase of a new property before selling your existing property.
- You can minimize pressure, including not being forced to sell your existing home
at a lower price.
Disadvantages:
- Interest payments will keep adding up until your existing property sells.
- Sufficient equity is required in your current home to support the purchase.