Brush up on your loans. The loan-type cheat sheet.

You’d think a loan was a loan, wouldn’t you? But there’s a surprising number of variations.

So it’s worth running your eye over our little cheat sheet – it really helps you choose the type that’s right for you when the time comes...

Variable rate loan

As the name suggests, the interest rate can change over the life of the loan. This gives you flexibility, but can also leave you open to rate rises. These loans also offer the option of additional repayments and redraw, as well as offset accounts.

Fixed rate loan

Basically, this is the opposite of a variable rate loan. Your interest rate and repayments will stay the same during the fixed term, no matter what. So no surprises. You can’t make extra repayments during the fixed term though, so it’s worth thinking about a split loan if you’re planning to pay extra.

Split loan

The best of both worlds—you’re able to fix part of your loan, while leaving the rest variable.

Packaged loan

Professional packages offer discounts on standard variable and fixed rates, the waiving of fees, and in some cases, great deals on other products from the same lender.

Low-doc loan

Designed for people who may have trouble getting together the paperwork needed for a full documentation home loan. This is a great option if you’re self-employed or own a small business.

Introductory rate loan

Also known as ‘honeymoon’ loans, these offer a low interest rate for a short period (eg. a year), after which the rate moves to the standard variable rate.

Bridging loan

If you already own a property, this is a short-term loan that can help you finalise the purchase of your new property before you’ve sold your existing one.

Line of credit loan

This one’s perfect if you need easy access to cash for renovating or investing. It lets you draw against the loan balance, up to a credit limit set by the lender.