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However, people who have an exceptionally good rapport with the bank do not need this kind of additional features and accompaniments such as redraw facility or a line of credit. Such people can opt for a basic variable loan. Also people who are low on their budget for a new home and are left with very little extra cash to spare can opt for a Basic Variable Loan Program.
Although a few basic variable loans offer additional features such as flexibility with repayments (so that you can repay and clear off your loan early), internet banking, redraw option and other facilities, most of the Basic Variable Loan Programs are plain enough, with a lower interest rate in comparison to a standard variable loan and also devoid of all the extra costs associated with the add-on features.
Basic Variable Loan Programs have a relatively low interest rate throughout the life of the loan as a result of which the repayments are also usually lower than in the case of a standard variable loan. The interest rate is usually half to one percent below the interest rate of a standard variable loan and the ongoing fee is also lower in many cases. Loan repayments can be made on a weekly, fortnightly or monthly basis.
The biggest drawback of the basic variable loans is that many of these kinds of loans cannot be used in combination with other loans and they are not portable.
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