This loan is paid at a variable interest rate that is high. The best way you can reduce the amount of interest you have to pay on this loan is through making additional repayments to repay your loan off early, which reduces the interest you must pay since this would decrease your overall loan term.
Security in making early repayments is provided through the redraw facility, where you can redraw any of these extra funds you’ve put forth as long as you meet the minimum allowed amount every time you redraw.
For your regular principal and interest repayments, you have the ability to choose a weekly, fortnightly or monthly schedule and also have the choice to interest-only repayments for a specified time frame.
There is a minimum loan amount that must be borrowed for this loan and you have to make at least a 20 per cent deposit, however there is no maximum loan amount.
The SMSF Loan is good for both investors looking to buy an investment property and refinancers of an existing SMSF loan who are looking for a flexible repayment schedule and the ability to make interest-only repayments for a period of the loan term.
The high interest rate and large amount of fees are best suited to investors who can cover these costs.
The SMSF Loan offered by Bank First could be a good option if you’re looking to invest in a property or refinance an existing SMSF loan and want to have features such as the ability to make early repayments and redraws and to make interest-only repayments for a period.
This loan does have a high variable rate of interest, very high cost to establish and at least a 20 per cent deposit requirement, so it would be worthwhile to research your options and see if these cons counterbalance the features of this loan to meet your specific needs.
Find out more information about the SMSF Loan by clicking the link below.