Understanding Interest

Understanding interest rates is an important first step if you want to pay off your home loan quickly.

How your interest is calculated

We calculate the interest you owe daily. These calculations are based on the balance of the loan at the end of each business day. That means that the balance on a Friday is the amount used to calculate the interest for the following Saturday and Sunday. It also means that the balance on the business day before a public holiday is used to calculate the interest during the holiday.

When your interest is charged

These individual daily calculations are added up and processed to your loan account on the same day of the month that your loan settled.

Why your interest charges will vary

Sometimes the date falls on a weekend or a public holiday. When this happens we’ll post your interest calculation to your account on the next business day.

Variations in your interest charges occur because not all months are the same length. You may be paying interest on as few as 28 days or up to 34 days. This depends on when weekends and public holidays fall.

Where the Line of Credit fits in

Your Direct Credit Line of Credit has an anniversary of the 15th of every month. This is when a statement is produced and mailed to your postal address. The statement shows you the amount of payment required and then this exact amount is taken on the second banking day of the following month.

What to do if you’re still not sure

If you’re still not sure, get a copy of your latest statement and call the Direct Credit Customer Service team on 1800 000 800. They’ll be glad to guide you through your statement and clarify any questions you may have.

Principle & Interest Loan

This is the most common and popular loan in the marketplace today. The standard loan term is usually between 20 and 30 years. Features of these types of loan usually include:

  • Variable repayment options
  • Salary Crediting
  • Free Redraw
  • Split loan ability which allows part of the loan amount to be   fixed and part to remain variable, up to 4 splits
  • Loan portability which allows borrowers to sell their house and buy another without finishing their current home loan and starting another

Interest Only Loan

Some people prefer to minimise their repayments on a home loan, so choose only to make the interest only portion of their repayments. These loans, Interest only are typically used by people who are either in business and wish to maximise their cash flow on hand, or by investors who wish to buy investment properties, and use negative gearing options.

While interest-only repayments mean you may never own the house while only making interest-only repayments, the loans revert to principle and interest generally after 10 years.

Lines of credit interest only can be up to 15yr terms.

Please contact Direct Credit Homeloans Australia today and ask us about our Interest only home loans.

 

Extra repayment calculator. Direct Credit Home Loans Australia

Extra Repayment Calculator

Our Extra Repayment Calculator works out how much you could be saving by making extra repayments towards your mortgage.

Loan Repayment Calculator

Learn More about Home Financing with Our Loan Repayment Calculator

At Direct Credit, our loan repayment calculator is designed to help you understand your home loan (or prospective home loan) from more angles. Often, the most significant focus for would-be homebuyers is getting the home loan. Understanding how loan repayment will affect your long-term finances is a lower priority. Using our calculator helps you consider things more thoroughly.

The Information You Will Need to Use the Loan Repayment Calculator

When you use Direct Credit’s monthly loan repayment calculator, you will need to provide several details about your loan to get usable results. These data points include:

  • Loan amount: How much money are you seeking from the lender?
  • Interest rate: What interest rate has the lender offered for your loan?
  • Loan term: Different home loans come with different repayment terms. Is it ten years? 15? 30? Input that number here.
  • Loan fee: Would your loan terms come with any additional fees, such as Lender’s Mortgage Insurance? If so, are you paying those fees monthly, fortnightly or weekly?
  • Repayment frequency: Most buyers set up their home loans for monthly payments, but you might choose to pay weekly or fortnightly. Include that information here.

Being as specific and exact with these details as possible will improve the effectiveness of the calculator. Even you are just doing some research to find out whether buying a home is affordable for you right now; it is still a good idea to speak with a lender to find out about the kind of loan for which you might qualify. Direct Credit would be happy to help on this front.

Other Loan Calculators That Direct Credit Offers

The loan repayment calculator is just one of the financing-related calculators that we offer at Direct Credit. Indeed, to get an even more detailed sense of your loan terms, your repayment timeline and the financial implications of shouldering a home loan, you might also use one of these calculators:

  • The additional loan repayment calculator: If you have the cash, making extra payments on your mortgage loan can help you build equity faster and rid yourself of monthly payments sooner. Our extra repayment calculator is set up to help you determine how much faster you can pay off your loan if you commit to making additional payments.
  • The loan comparison calculator: Are you considering multiple loan options from several different lenders? Rather than enter that information separately into our standard monthly loan repayment calculator, use our loan comparison calculator to get quicker and more direct comparisons between two financing options.
  • The property selling cost calculator: Largely, selling your property is something that is going to net you a substantial chunk of change. However, there are also costs involved in this process, from agent commissions to advertising to fees. Our property selling cost calculator will help you work out these costs before you sell, potentially making it easier to budget for a new property purchase.

About Direct Credit

Direct Credit has been in business since 1999, serving as a non-bank alternative for home and commercial loans. Feel free to use our calculators whenever you please, and reach out to us if you have any specific questions about the loans we offer.

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1800 000 800 Australian Credit License Number 392727