09 October, 2006

Redraw Facility - Loan

In current market, most of the home loan packages are offering REDRAW facility. It is a good for borrowers as they can put in their extra money to offset the loan interest and principle to shorten the loan tenure, and in other sides, it also facilitates the withdrawal of any extra payment once the borrower need some money for emergency or any.

Here, what i would like to highlight is that, Loan Agreements are varied from banks to banks and the clauses insides have to be read through thoroughly, at least once. It will give you a better picture of how the condition and the facilities apply. Get banker to explain if you have any doubt, as this is their duty to explain any question raise under the agreement.

For under construction property, some of the banks allow for Prepayment and gives daily rest interest facility. However, it imposes a condition that NO WITHDRAW until fully release of loan. Take Note on this points, under construction period is about 24 months or 36 months, as this period no withdraw is allowed. To prevent any cash flow problem within this period, do spare some money on hand as to avoid the misinterpretation of REDRAW facility given.!!