What Is A Loan Redraw Facility?
What is a Loan Redraw Facility?
A loan redraw facility is a feature of an offset home loan where you can access additional funds which have been paid into the home loan account. It is a great way to access surplus funds without taking out a new loan or paying additional fees.
Advantages of a Loan Redraw Facility
There are many advantages to taking out a loan redraw facility. Firstly, you can access funds quickly and easily. There are no upfront fees or charges to access the funds and you will not be required to take out a new loan. Additionally, the funds can be accessed at any time, allowing you to manage your finances as and when needed.
How Does a Loan Redraw Facility Work?
The loan redraw facility works in a very simple way. Each time you make a payment into your home loan account, the funds are placed into a separate account. This account is then linked to the loan account, allowing you to access the funds at any time. The funds can be accessed via internet banking, phone banking or in person at a bank branch.
What Are the Requirements to Use a Loan Redraw Facility?
The requirements to use a loan redraw facility depend on the lender. Generally, you will need to have a minimum balance in your loan account to access the funds. You will also need to have made regular payments into the account over a period of time, as some lenders limit how often you can access the funds.
Is a Loan Redraw Facility Right for You?
A loan redraw facility can be a great way to access additional funds when needed. However, it is important to consider your own situation before deciding if this is the right option for you. If you are looking for a way to access funds easily and quickly, a loan redraw facility may be a good option. On the other hand, if you are looking to access a large amount of money, you may want to consider other options such as taking out a personal loan.
Conclusion
A loan redraw facility can be a great way to access additional funds when needed. It is a convenient and cost effective way to access funds quickly and easily. However, it is important to consider your own situation before deciding if this is the right option for you.
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