How do I compare renovation loans?
- Price — comparative pricing factoring in interest and fees
- Features — like the complexity of the application, the time involved before settlement, product management, customer service and loan closure
- What are the interest rate and the comparison rate?
- How do these rates compare to other types of loans?
- What are the fees and charges? (e.g. upfront, ongoing, early exit)
- What are the terms and conditions?
- Do the loan term and loan amount fit your needs?
- Can you afford the repayments?
- Are you comfortable with the lender? Have you checked its reputation and accreditation?
- Are there flexible repayment options? Usually, you can choose between weekly, fortnightly or monthly repayments according to what suits your pay cycle. However, not all lenders offer this. It may matter to you, it may not
- Compare a loan’s conditions and fees around making extra repayments and paying the loan off before the end of the term. This can be a great way to reduce the overall cost of your car loan, but not if you’ll incur extra penalties
- Can you use the funds for the renovation you have planned? Or are your plans still coming together making that a difficult question. You can’t always use the borrowed money for whatever you like.
For example, when extending a mortgage, you may only be able to spend the loan funds on improvements that meet the lender’s criteria. Other types of loans can be more flexible. Do make sure your purchase plans match the lender's policies
- What are the options for managing the loan over time? Check and compare how easy the loan will be to manage with regard to repayments, your personal details, any refinancing down the track. The option to manage your account online is often available, but not always, and some lenders have more functionality than others. Using direct debit for repayments is common, yet without it, monthly repayments will be much less convenient and you are more likely to be penalised for late payments if you aren’t perfectly disciplined