Redraw loan
A redraw loan can be an effective way to pay less interest while having access to savings.
With a redraw loan, you're able to draw on the additional funds you've added to your home loan should you have any unexpected expenses.
What is a Redraw Loan?
A redraw loan offers the flexibility to make additional payments on your loan which can be redrawn on later down the line if needed. This type of loan allows you to "redraw" the additional funds you've paid above the required minimum repayment, giving you access to funds should you have any unexpected expenses.
An advantage of a redraw loan is the ability to reduce the amount of interest you are paying on the loan. By making additional payments, you decrease the principal balance, which in turn reduces the interest you pay over time. Additionally, having access to these extra funds provides a safety net, ensuring that you can access these funds should you require. Redraw loans offer both the benefit of saving on interest and the convenience of flexibility, making them an attractive option for borrowers looking to manage their finances effectively.