The People’s Choice Credit Union Line of Credit Loan is a flexible loan option combining your home loan with your transaction account and through depositing your salary into this account, every dollar you save offsets the amount of interest you pay on your loan balance.
Your line of credit can be used to fund home or investment purposes without having a set monthly repayment minimum so long as you pay all fees, charges and interest each month and only make withdrawals up to your approved credit limit, functioning very similar to a credit card.
There is also the option of making early repayments and paying interest-only for a longer than usual period and you can split this loan into both a fixed and variable interest rate, giving you more certainty over your repayment amounts – which could be a good option considering the variable rate offered on this loan is high.
A Visa credit card is offered on this loan with an introductory interest-free period, but be aware of any additional costs and fees applicable with this product.
While the Line of Credit Loan is available for home, investment and vacant land purchases and refinancing at a minimum deposit requirement of 10 per cent, there is a minimum and maximum borrowing range available that could be restrictive.
And, lenders mortgage insurance should be factored in as an added cost to the overall cost of this loan if you’re deposit is less than 20 per cent.
A line of credit loan is essentially money on tap and while this can give you a great deal of flexibility, it does require a lot more discipline than more standard home loan offerings. The limited borrowing range for the Line of Credit Loan can be quite limiting for some borrowers, as well as the high upfront cost.
Line of credit loans generally have higher interest rates than traditional home loan products which means that the flexibility of having funds on tap comes at a price, in this case it’s the high upfront fee and ongoing monthly fee alongside a higher rate.
The accessibility of funds through a line of credit loan also make this loan riskier for borrowers with less discipline. Risk aside, the freedom of a line of credit can be useful for borrowers that have less of a regular income and receive monthly sums of money from rent or other investments.
The long interest-only term is a great bonus for investors, but the suitability of the Line of Credit Loan from People’s Choice Credit Union depends on whether or not the pros and cons balance to meet your needs and criteria.
See if the People’s Choice Credit Union Line of Credit Loan is available to you through information provided at the following link.