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Standard Variable Home & Investment Property Loan

Standard variable loans are Australia's most popular type of home loan or investment property loan. These loans can be used for either the purchase of a new home or an investment property. The interest rate varies throughout the loan term. These loans generally offer excellent flexibility, low fees and often offer great features such as an offset facility, redraw facility, no limits on additional repayments and in most cases, no early pay out penalties.

Advantages:

* Flexibility
* Lump-sum payments can be made without incurring a penalty.
* If interest rates fall, your repayments will fall.
* Often offer extra features.
* Can be used for either the purchase of a new home or investment property.

Disadvantages:

* If interest rates rise your repayments will rise.

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Basic Variable Home & Investment Property Loan

Basic variable loans typically offer lower interest rates and fewer features than the standard variable loans. These loans can be used for either the purchase of a new home or an investment property. You often have the option to pay for any additional feature required. Interest rates and repayments will vary throughout the loan term.

Advantages:

* Relatively low interest rate.
* Lower repayments.
* Can be used for either the purchase of a new home or investment property.

Disadvantages:

* Many of these loans do not have the same features or flexibility as other variable loans.

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Intro Rate 'Honeymoon' Loan

An introductory rate loan generally offers a guaranteed low rate for an initial period of time (usually 12 months) after which most will revert to the standard variable rate. The rate can be fixed or variable.

Advantages:

* These loans are often used for the purchase of a new home.
* Usually the lowest rates on the market.
* Some lenders provide offset accounts on these loans.
* Opportunity to reduce the principal quickly during the 'honeymoon' period.

Disadvantages:

* Payments will increase after initial introductory/'honeymoon' period

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Fixed Rate Loan

These loans can be used for either the purchase of a new home or an investment property. Under a fixed rate loan, the interest rate is fixed for a specified period, usually between one and five years. This loan gives you the certainty of knowing exactly 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 during the fixed term.

Advantages:

* Guaranteed rate, if interest rates rise your repayments won't.
* Can be used for either the purchase of a new home or investment property.

Disadvantages:

* Reduced flexibility.
* Extra repayments may incur a fee or be limited.

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100% Offset Loan Account

A 100% offset loan is very similar to an all-in-one loan. Rather than putting all your salary and other income into your loan, it goes into an offset account that is directly linked to your home loan. Any balance in the offset account is 100% 'offset' against your home 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. attached.
* Can be used for either the purchase of a new home or investment property.

Disadvantages:

* May have higher monthly fees attached to the account.
* May require a minimum balance in the account

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Line of Credit Loan

A line of credit loan provides you with access to the equity in your home or investment properties up to a pre-approved limit. You access the funds as you need to. The interest rate on a line of credit loan is usually a variable rate and repayments are interest only.

Advantages:

* You can use the money when you need it and pay it back when you can.
* 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.

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Low-Doc & Credit Impaired Loans

A low documentation 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.

Advantages:

* Simple income declaration form.
* No tax returns.
* Minimal financial statements.
* Can have features such as redraw, line of credit, variable or fixed rates, principal and interest or interest only.
* Can be used for either the purchase of a new home or investment property.

Disadvantages:

* Generally a higher interest rate.

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Construction Loans

If you are building your own home or investment property, a construction loan may be suitable for you. This loan requires a fixed price building contract from a registered builder. These loans are usually interest only for the period of building and then become principal and interest once building is completed. A construction loan allows you to draw money as is required whilst building. Also, with the usual necessary documents required when applying for a loan, construction loans also require a 'fixed price building contract' and 'council approved plans'.

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.
* Given it is a variable loan; loan repayments will increase if interest rates go up.

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Commercial Property Loans

Commercial property loans are used to help you buy a commercial property. A commercial property could be any of these, an industrial warehouse, a factory, a professional office or a shop. Commercial property loans can be secured by the commercial property you are purchasing or using residential security. The repayments on Commercial loans can be varied to suit your cash flow with options to have the repayments Principal and Interest or Interest Only and the interest rate Fixed or Variable.

Advantages:

* No more renting
* Own your own work premises
* Sound investment with the opportunity to lease for long periods with annual rent reviews
* Commercial Loans can be taken out in company name, personal names or held in Trusts


Disadvantages:

* Interest rates are usually higher due to the type of security offered
* Maximum loan terms of 15 years
* Will need 30% equity or cash payment as lenders will only lend up to 70% of the purchase price.

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Business Loans

Business loans can help you fund company growth or finance a new business initiative, expansion within the business, investment funding & for the purchase of equipment for your business. Business loans offer the flexibility of fixed and variable interest rates, with a choice of repayment options to suit your cash flow requirements.

Advantages:

* Can assist with the growth of your business
* You can re-draw on the available funds
* Various forms of financing options are available
* Flexible repayment options

Disadvantages:

* Property security is usually required
* Lenders may require Guarantees from the Directors of the business

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Overdrafts

An overdraft is commonly used to help your business meet its day to day working capital requirements. An overdraft facility is a revolving credit line with a variable interest rate. Essentially, an overdraft is a method of allowing an account balance to operate in a debit balance up to an agreed / approved limit by the lender.

It's an ideal solution to assist you to smooth out short-term fluctuations in your cash flow.

Advantages:

* You can easily manage seasonal cash flow demands on your business
* You can re-draw on the available funds
* You may be able to negotiate early settlement discounts with your creditors
* This facility can assist you in growing your business
* Save on your interest expense by only paying for the funds that you use from the overdraft

Disadvantages:

* Generally a higher interest rate is charged
* Property security is usually required 


 
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Invoice Financing

Invoice Financing is for businesses who wish to improve their cash flow by converting the money that is owed to them by their debtors into available cash. It's a fantastic way to fund business growth, develop new products or services, make acquisitions or complete business succession plans.

It is designed for well-established companies who sell to other businesses on credit terms and who have expertise in managing and maintaining their debtors ledger.

Advantages:

* It can assist you with the growth of your business
* Access money tied up in your invoices
* Accelerate your cash flow
* Negotiate early settlement discounts with your creditors

Disadvantages:

* Higher interest rates are charged

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