Loan TYPES

Variable

Variable home loans are most common loan offered by Lenders. The rate fluctuates according to the market index, as set by the Reserve Bank and the margin applied by the lender.  Your regular repayments pay off both the interest and some of the principal.  You can also choose a basic variable loan, which offers a discounted interest rate but can have fewer loan features, such as a redraw facility, offset and repayment flexibility.

Fixed

If you are looking for the security to have a fixed interest rate for your home loan, irrespective of the rate fluctuation in the market, you can apply for Fixed Home Loan. 

The interest rate is fixed for a determined period, commonly the first one to five years of the loan. This will mean your regular repayments stay the same regardless of changes in the variable interest rates. At the end of the fixed period you can decide whether to fix the rate again, at that lenders current fixed rate on offer, or move to a variable loan. 

Split Rate Loans

A split loan allows you to borrow part of your mortgage on a fixed interest rate and the remainder on a variable interest rate – all under a combination of loan products.  You decide on the proportion of variable and fixed. You enjoy some of the flexibility of a variable loan along with the certainty of a fixed rate loan, which is the most common combination.

Interest Only

Interest only loans are a type of loan whereby the borrower only has to pay the interest on the principal balance. Because they are only required to repay the interest portion, the major benefit lies in lower monthly repayments, which is why these loans are primarily intended for people purchasing investment properties. In theory, the loan will never need to be completely paid off, provided that the interest payments are made regularly.

Line of Credit

Is a loan with a pre determined limit, you can pay into and withdraw from your loan as if it was a everyday transaction account. As long as you keep up the regular required repayments. Many people choose to have their salary paid into their line of credit account. This type of loan is good for people who want to maximise their income to pay off their mortgage quickly and/or who want maximum flexibility in their access to funds.

Low Doc

Low Documentation (Low Doc) Home Loans are designed for self-employed customers and small business owners who may not have access to the financial statements and tax returns usually required when applying for a home loan.  These loans often carry higher interest rates or require a larger deposit because of the perceived higher lender risk. In most cases you will be financially better off gathering together all the documentation required for another type of loan. But if this isn’t possible, a low doc loan may be your best opportunity to establish a loan.

Personal  Loans

A Personal Loan is a smaller Loan and is generally used to finance a car, renovations to a home, consolidation of debt, to finance a vacation or any other worthwhile goods and services. A personal loan is of a shorter term than a Home Loan, usually no more than 7 years.

Car Loan

Is a loan used to finance a Motor vehicle by taking a charge over that asset. A Car Loan can be usually offered up to no more than 7 years.

The main advantage of a Car Loan over a Personal Loan is the interest rate. As the lender takes a change over the asset and hold it as security, a more competitive rate can be offered. 

Chattle Mortgage

A Chattel Mortgage is a commercial finance product used to finance Vehicles and Equipment.

Under a Chattel Mortgage a finance company lends money to the customer to purchase a car, vehicle or equipment (the "chattel"), and the customer makes regular repayments.

The customer takes ownership of the vehicle/equipment at the time of purchase, but the finance company also takes out a "mortgage" over the asset to provide security for the loan.

Once the term of the loan is completed and any residual (balloon) value is paid, the finance company removes the Charge, giving the customer clear title to the Asset.