RURAL LOANS

• Overdraft.
• Loan Accounts.
• Lines of Credit.
• Commercial Bill Facilities.
• Business Loans.
• Debtor Finance.

Loan structuring to suit your needs with fixed or variable interest rate options.
Flexible loan terms that may include repayments Monthly, Quarterly, Half Yearly Annual or Seasonal.
Interest in arrears or advance.
Options of switching products to take advantage of interest rates and fee structures.
The use of sub accounts to control different aspects of your business.
Caps and Collars on lending facilities to manage Interest rate risk.

VEHICLE & MACHINERY LOANS

Chattel Mortgage

Enables you to purchase assets and
the Bank takes a mortgage over these assets as security.
As the ownership rests with you, and if you are an ABN holder you may be eligible to claim full GST back in your next BAS as well as claiming depreciation.*

*This will depend on your individual circumstances. We recommend you seek Professional advice.

Hire Purchase

It saves you on capital outlay on
acquiring assets and may also have potential tax advantages such as claiming interest and depreciation.*

The ownership of the Asset remains with the lender until final payment is made.

*This will depend on your individual circumstances. We recommend you seek Professional advice.

Leasing

It allows you to conserve working capital for the business without tying up funds in depreciation Assets.

Title of the Asset remains with the Lender until an offer to purchase is made at the end of the contract.

You may be able to claim the actual Lease payments as a tax deduction. * A residual value (end value) may be set and must be within ATO guidelines depending on the effective life of the goods.

*This will depend on your individual circumstances. We recommend you seek Professional advice.

_{Disclaimer: This document is for information purposes only, and must not be relied upon as a substitute for professional services or legal advice.}

Guide to the Types of Loans

Here are some guides and tips to help you understand the mortgage and finance industry and obtaining and managing finance.

HOME LOANS

Basic Home Loan

This loan is considered a no-frills loan and often offers a very low variable interest rate with little or no regular fees.
Be aware they usually don't offer additional extras.
These loans are directed towards people who don't foresee a dramatic change in personal circumstances and who may not need to adapt the loan in accordance with any lifestyle changes.

Variable Interest Rate Loans

This is a common offer by banks and has been used by many people over the years.

These have repayment periods of up to 30 years and are regularly used by home buyers today.

Advantages: Depending on the lenders individual products, they usually have additional features such as offset facility, redraw, extra repayments and others.
Disadvantages: The interest rate is always higher than No Frills Basic Home Loan rate.

Fixed Interest Rates

This type of interest rate allows you to fix the interest rate you borrow at for a certain period of time within the overall loan term.
Fixed terms tend to be from one to five years however some lenders may offer 10-15 year terms.
With a fixed interest rate you have the certainty of a set monthly repayment as you are not affected by changes in the official cash rate.
This is positive when the official cash rate rises as your repayments would not increase, however you cannot reap the benefits of a reduced repayment if the official cash rate falls.
With a fixed interest rate your loan provider is taking the risk on the market, which is based on their assumptions about future interest rate movements.

'Honeymoon' Loan

This loan is attractive as it offers lower interest rates than the standard fixed or variable rates for the initial (honeymoon) period of the loan (i.e. six to 12 months) before rolling over to the standard rates. The length of the honeymoon depends on the lender, as too does the rate you pay once the honeymoon is over.
This loan usually allows flexibility by allowing you to pay extra off the loan.
Be aware of and what your repayments will be after the loan rolls over to the standard interest rate.

These loans may be appropriate for people who want to minimise their initial repayments (whilst perhaps doing renovations) or to those who wish to make a large dent in their loan through extra repayments while benefiting from the lower rate of interest.

Redraw Facility

This loan allows you to put additional funds into the loan in order to bring down the principal amount and reduce interest charges, plus it provides the option to redraw the additional funds you put in at any time.
Simply put, rather than earning (taxable) interest from your savings, putting your savings into the loan saves you money on your interest charges and helps you pay off your loan faster.
Meanwhile, you are still saving for the future.

Be aware there may be an activation fee to obtain a redraw facility, there may be a fee for each time you redraw, and it may have a minimum redraw amount.

Line of Credit/Equity Line

This is a pre-approved limit of money you can borrow either in its entirety or in bits at a time.
The popularity of these loans is due to its flexibility and ability to reduce mortgages quickly.

However, they usually require the borrower to offer their house as security for the loan.

A line of credit can be set to a negotiated time (normally 1-5 years) or be classed as revolving (longer terms) and you only have to pay interest on the money you use (or 'draw down').
Interest rates are variable and due to the level of flexibility are often higher than the standard variable rate.

Some lines of credit will allow you to capitalise the interest until you reach your credit limit ie. use your line of credit to pay off the interest on your line of credit.
Most of these loans have a monthly, half yearly or annual fee attached.

These loans are suited to people who are financially responsible and already have property and wish to use their property or equity in their property for renovations, investments or personal use.

This is a loan which works as an account where all income is deposited in the account and all expenses come out of the account.

The benefit of the All In One Account is its ability to reduce the amount owed and thus the interest payments while providing a one-stop finance shop where your loan, cheque, credit and savings accounts are combined into one.
Normally these loans will be at the standard variable rate or slightly higher and may incur monthly fees.

Be aware that if the account is split into the loan account, with credit, cheque and ATM facilities placed into satellite accounts, you will need to check your access to funds, how many free transactions you receive, and what associated fees the loan may have.
These loans are suited to medium to high income earners.

This loan is similar to an All In One Account however the money is paid into an account which is linked to the loan - this account is called an Offset Account.
Income is deposited into the Offset Account and you use the Offset Account for all your EFTPOS, cheque, internet banking, credit transactions.

Whatever is in the Offset Account then comes directly off the loan, or 'offsets' the loan amount for interest.
Effectively you are not earning interest on your savings, but are benefiting as what would be interest on savings is calculated on a reduction on your loan.

The advantages are similar to the All In One Account.
These loans normally have a higher interest rate and higher fees due to their flexibility.

Partial offset account and an interest offset account are also available.