How redraw 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.
When do you update the amount available?
The amount available is calculated on the day after you use your redraw facility or your next repayment due date.
What happens if I make additional payments up to the full outstanding balance?
Well done! You will save on interest and you are on track to potentially pay off the loan sooner.
Is there a minimum redraw amount?
There is currently no minimum redraw amount on current Bank Australia loans. Some older loans may have a minimum redraw amount of $500.
What happens when I redraw an amount?
When you withdraw money from your redraw, your loan balance will increase and you will be charged interest on the higher balance. You should continue to make your scheduled repayments - as displayed in the app, internet banking or loan statement to ensure the additional amount borrowed will still be paid within the agreed timeframe.
How do I know how much is available for redraw?
You can access your ‘available’ for redraw amount any time through internet banking or through the Bank Australia app.
Do you charge any fees for accessing an amount available for redraw?
Can I redraw on my Bank Australia loan to a non-Bank Australia bank account?
If your loan does have a redraw facility and there is an amount available for redraw, you can transfer from your Bank Australia home loan to a non-Bank Australia bank account. It is important to remember that accessing your redraw will increase what you owe on your home loan.
What happens if I have an amount available in redraw, but fail to make contracted payment?
If your contracted repayment isn’t made, and you have a balance available in redraw, it will be directed to making your contracted repayment. For example, if your contracted repayment was $1,000, and you had $2,000 available in redraw, the redraw would reduce by $1,000 and the $1,000 would satisfy your contracted repayment.
If I have paid all the amounts owning on my loan, what happens to my redraw facility?
Your redraw facility is still available. However, the amount that you have available for redraw continues to decrease in line with your minimum monthly contracted repayments.