2019 Fixed Rate Redraw Facility Home Loans from 3.76% | RateCity
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Find and compare personal loans with redraw facility
0 year to 7 years
Packed with features, this fixed rate personal loan offers no ongoing fees, unlimited extra repayments and loan purpose flexibility.
1 year to 7 years
Offering a redraw facility and no fees for extra repayments, you can pay your loan down quicker and still have access to your money.
1 year to 7 years
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Understanding the difference between secured vs. unsecured personal loan
Suppose you find yourself looking to apply for a personal loan to fund a new car, renovations or something else. You’ll need to get a better understanding of the difference between an unsecured personal loan vs. secured personal loan.
If you’re conscious that your cash flow sometimes requires a top up, whether for business or personal reasons, you might consider a loan with a redraw facility.
What is a redraw facility?
A redraw facility is the ability to borrow funds that you have already repaid. You’ll often spot this as a feature of variable rate loans. You can also be flexible about how you pay down your loan, for example using funds in a savings account to pay off some of the loan. If you have made extra repayments a redraw facility can allow you to claw back the extra amount in certain circumstances.
Why do people use a redraw facility?
There are a number of reasons why you might want to use a redraw facility:
- You might like the idea of having an emergency fund at your disposal in case you incur unexpected expenditure, such as car repairs, urgent home refurbishment or medical bills;
- If you can afford to make extra payments at least a few times every year this would make it easier to manage your funds;
- Your extra payments will reduce the amount of debt you have and this in turn will reduce the interest you’re paying.
What are the main features?
Your redraw facility brings benefits because any extra payments made offset the capital or principal you have borrowed. The amount you pay in interest will therefore be reduced so you would benefit from repaying your loan more quickly; however, your lender may set limits on how much you can overpay and redraw. If you manage your redraw facility well you can use your home loan or mortgage like a transaction or everyday account.
You may be able to pinpoint redraw facilities available for basic home loans and package home loans. Some interest only home loans also offer a redraw feature, as do some specialty home loans.
What are the pros and cons of redraw facilities?
With redraw facilities you can make extra loan repayments when it suits you and then take extra funds when you need them. This is very useful in emergency situations or in other circumstances when you incur unforeseen expenses. A redraw facility also gives you peace of mind, as you know that you can continue to reduce the loan amount while you still have access to additional cash in your account.
Bear in mind that some redraw facilities come with additional fees for withdrawing and depositing money. Lenders might charge these fees immediately or offer a specific number of free overpayments and redraws per month. In some cases redraw facilities may be limited to minimum amounts and lenders can also put limits on how frequently you use redraw facilities. This can make it difficult to redraw funds regularly.
Finally, if you choose to settle the loan in its entirety before the fixed term ends, with fixed rate home loans you may discover there are high exit fees, also known as break costs.
Always check the terms and conditions of your loan contract for specific information about redraw restrictions.
Kate was one of RateCity's Personal Finance Commentators. She has been a journalist for more than a decade, most of which has been spent writing about money. Most recently, she was the Australian Financial Review's personal finance correspondent. She is passionate about personal finance and women's independence.
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Frequently asked questions
Are there alternatives to $2000 loans?
If you need to borrow $2000 or less, alternatives to getting a personal loan or payday loan include using a credit card or the redraw facility of your home, car or personal loan.
Before you borrow $2000 on a credit card, remember that interest will continue being charged on what you owe until you clear your credit card balance. To minimise your interest, consider prioritising paying off your credit card.
Before you draw down $2000 in extra repayments from your home, car or personal loan using a redraw facility, note that fees and charges may apply, and drawing money from your loan may mean your loan will take longer to repay, costing you more in total interest.
Can you refinance a $5000 personal loan?
Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.
If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.
What is the average interest rate on personal loans for single parents?
Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.
Should I get a fixed or variable personal loan?
Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.
A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.
Can I repay a $3000 personal loan early?
If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.
Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.
Are there low doc personal loans?
Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.
It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.
Can unemployed single parents get personal loans?
It can be more difficult for unemployed borrowers to successfully apply for a personal loan. Most lenders require borrowers to have a regular income available to cover the cost of loan repayments.
If you’re self-employed, or if less than half of your income comes from Centrelink, you may not be eligible for some personal loan options. Consider contacting the lender before applying.
Will comprehensive credit reporting change my credit score?
Comprehensive credit reporting may change your credit score, either positively or negatively, depending on an individual's situation.
Under comprehensive credit reporting, credit providers will share more information, both positive and negative, about how you and other Australians manage credit products. That means credit reporting bureaus will be able to make a more thorough assessment of everyone’s credit behaviour. That will lead to higher scores for some consumers and lower scores for others.
What do single parents need for a personal loan application?
Much like applying for other personal loans, applying for personal loans for single parents will likely require the following:
- Proof of identity
- Proof of residence
- Proof of income
- Details of assets (e.g. car, home)
- Details of liabilities (e.g. credit cards, other loans)
- Loan amount
- Loan term
Can students with no credit history get loans?
It is possible for students with no available history of borrowing or managing money to get a personal loan, though it may be more difficult as well as expensive than for borrowers with a good credit history.
Having no credit history means having no credit score. While many lenders may consider having no credit score to be better than having a bad credit score, they may still consider it riskier to lend to an unknown borrower and may charge higher interest rates or fees than to borrowers with good credit scores.
Can you pay off a quick loan early?
Many lenders will allow you to make extra repayments onto a quick personal loan when you can afford them, or even exit the loan early, which can help reduce the total interest you are charged. Be sure to check your quick loan’s terms and conditions, as some lenders charge early exit fees for paying off a loan ahead of schedule.
Is it hard to improve your credit score?
It can be hard to improve your credit score, as it usually requires sacrifice and discipline, but hard doesn’t necessarily mean complicated. Some simple ways you can give your credit score a boost include closing extra credit cards, reducing your credit card limit, pay off any loans and make loan repayments on time.
As a general rule, the lower your credit score, the more remedies you can apply and the greater the scope for improvement.
Can I get a $2000 loan on Centrelink?
If more than half of your income comes from Centrelink benefits, it may be more difficult to have a $2000 loan application approved. Many lenders will check if you can afford a loan’s repayments on the income from your job before they’ll approve an application, and many won’t count Centrelink payments when assessing your income for this purpose.
Some lenders may offer $2000 loans to borrowers on Centrelink – consider contacting potential lenders to check before applying.
What can I use a bad credit personal loan for?
Generally, bad credit personal loans can be used for the following purposes:
- Debt consolidation
- Paying bills
- Buying vehicles
- Moving expenses
Some lenders restrict how their bad credit personal loans can be used as part of their commitment to responsible lending – be sure to check before applying.
What documentation is needed for a self-employed personal loan?
Personal loans may require a borrower to provide proof of identity, proof of residence, details of any other outstanding loans (including credit cards), details of assets they own (e.g. savings, car, property), and proof of income.
While borrowers in full-time or part-time employment can often provide payslips and similar documents to prove their income, self-employed borrowers may need to provide other documents, such as bank statements or tax returns, to demonstrate that their income can cover a loan’s repayments.
Can I get a $4000 personal loan if I’m unemployed or on Centrelink?
Before most providers of personal loans or medium amount loans will approve an application, they’ll want to know you can afford the loan’s repayments on your current income without ending up in financial stress. Several lenders don’t count Centrelink benefits when assessing a borrower’s income for this purpose, so these borrowers may find it more difficult to be approved for a loan.
If you’re unemployed, self-employed, or if more than 50% of your income come from Centrelink, consider contacting a potential lender before applying to find out whether they accept borrowers on Centrelink.
Which lenders offer bad credit personal loans?
Several dozen lenders offer bad credit personal loans in Australia. These are generally smaller lenders that aren’t household names.
Can I get a personal loan if I receive Centrelink payments?
It is hard, but not impossible, to qualify for a personal loan if you receive Centrelink payments.
Some lenders won’t lend money to people who are on welfare. However, other lenders will simply consider Centrelink payments as another factor to weigh up when they assess a person’s capacity to repay a loan. You should check with any prospective lender about their criteria before making a personal loan application.
Can I get guaranteed approval for a bad credit personal loan?
Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application.
It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit because there’s a higher likelihood that the personal loan will be repaid.
So a borrower with good credit is more likely to have a loan approved and to be approved faster, while a borrower with bad credit is less likely to have a loan approved and, if they are approved, may be approved slower.
How do I find out my credit rating/score?
You're entitled to one free credit report per year from credit reporting bodies like Equifax, Dun & Bradstreet, Experian and the Tasmanian Collection Service. You can also get a free report if you’ve been refused credit in the past 90 days.
Credit reporting bodies have up to 10 days to provide reports. If you want to access your report sooner, you’ll probably have to pay.