Here we tell you how it works.
When you take out a Bank Australia loan, we’ll have agreed with you the loan amount and how long you want to pay it back. Our loans have flexible repayment options. You can choose whether to make repayments weekly, fortnightly or monthly and whether you want to pay just the minimum repayment amount or something extra.
The contracted repayment amount is the lowest amount you need to pay us to repay your loan in the agreed time frame. Anything paid above the minimum repayment may allow you the option of accessing a redraw facility (if available) or taking a repayment pause. You may be able to use this money to pay for sudden expenses, or planned things such as:
- school fees
- a new car
What is a redraw facility?
A redraw facility is a feature of some of our home and personal loans. It’s a facility attached to your loan, not a separate deposit account. This means that it doesn’t give you the same flexibility to access the money in the manner that an offset account may.
If your loan has a redraw facility, when you make payments to your loan ahead of the contracted repayments, then this extra amount:
(1) reduces the balance owing on the loan; and
(2) appears as ‘available’ for redraw, meaning that you may be able to withdraw these funds from the loan.
Here’s an example:
- Say Maria needs to make a minimum repayment of $1,000 on her home loan each month.
- Maria decides she can afford to pay an extra $500 to her loan per month, making her repayments $1500 each month. This means that over the year, she’s paid $6,000 above what was due (12 months x $500 = $6,000).
- That extra $6,000 will reduce her loan balance, meaning that she will pay less interest over the loan. It may also be ‘available’ in the redraw.
Do all Bank Australia loans offer a redraw facility?
No. Your loan contract will set out if your loan has a redraw facility. If you’re unsure, call us on 132 888.
A redraw facility is currently available on:
|Loan type||Variable Rate||Fixed Rate|
|Basic Home Loan||Yes||Yes|
|Premium Home Loan||Yes||Yes|
|Premium Home Loan Package||Yes||Yes|
|Lifestyle Personal Loan - Property Owners||Yes||Not available|
|Commercial Loan (Secured)||Yes||No|