LINE OF CREDIT LOAN

The following diagrams are examples of Line of Credit...

Outstanding Loan Reduction Graph

A line of credit or equity loan. If used correctly with discipline and good spending habits can save thousands of dollars and years off the term of your loan.

Step 1. You start your line of credit with a credit limit up to 80% of the value of your property.

Step 2. Have your salary paid directly into the line of credit (with easy access and control of your money through ATM, EFTPOS, Cheque etc). This immediately reduces the principle and therefor reduces the interest on your loan.

Step 3. You need to have a credit card which is 55 days interest free (preferred) to pay as many of your day-to-day living expenses. This allows you to leave your salary in your account for as long as possible and gain the benefit of lower interest cost on your loan.

Step 4. You can choose principal and interest or interest only repayments.

Notes: The benefits of a line of credit is that the credit limit exists for as long as you require, giving you flexibility and control of your financial future.

A line of credit is only recommended for people who have the ability to budget and save money.