Standard variable loans are the most popular home loan in Australia. Interest rates go up or down over the life off the loan depending on the official rate set by the Reserve Bank of Australia and funding costs. 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 has fewer loan features, such as a redraw facility and repayment flexibility.
The interest rate is fixed for a certain period, usually the first one to five years of the loan. This means your regular repayments stay the same regardless of changes in interest rates. At the end of the fixed period you can decide whether to fix the rate again, at whatever rate lenders are offering, or move to a variable loan.
Split Rate Loans
Your loan amount is split, so one part is variable, and the other is fixed. 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.
Popular with self-employed people, these loans require less documentation or proof of income than most, but 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 getting together full documentation for another type of loan. But if this isn’t possible, a low doc loan may be your best opportunity to borrow money.
As complex as they sounds – they are actually a simple finance strategy which is typically used among Australians who are 60 years or older. In a nutshell, a reverse mortgage allows the borrower to use the equity in their home, usually in the form of a lump sum or a line of credit. The risk with this strategy lies in the fact that your home becomes collateral for the loan – so it’s seen as a ‘risk’ strategy among many homeowners, however there are ways greatly mitigate this risk with the right advice.
Many Australians will use a reverse mortgage as they enter their golden years to pave the way for a brighter retirement after working hard for the majority of their lives. To find out more about reverse mortgages, including the risks involved and how they can benefit you.
Finding the perfect business idea is one challenge, but the best biggest challenge which most entrepreneur run into is: ‘where is the money going to come from?” Crowd funding has risen in popularity over the recent years however it can be a tough game to master, Meaning traditional business loans are still the number one way Australian business owners get their dream businesses off the ground.
Similar to home loans, the business loan market has a wide variety of options to choose from, and the difference between the right loan and the wrong loan could seriously hurt your business success. A whole range of factors will affect the type of business loan which will suit your business best, so we always advise against rushing into any type of Business loan without a proper consultation with an approved finance broker. Learn the basic of business loans and find out how you can choose the right business loan to ensure your business not only survives, but thrives.
A personal loan can sometimes be a smarter choice for managing larger loan amounts than more common alternatives such as a credit card or topping up a Mortgage. It provides a controlled means of repaying the debt so it’s aid off as quickly as possible in order to minimize interest costs.
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