When you submit your application, the total loan amount is not finalised. This means that if you wish to reduce your loan amount, you may be able to do so before you sign your loan contract. One of our lending specialists will discuss your application with you and will be able adjust your final loan amount.
If there is a difference in amount between your current loan balance (with your current lender) and your new refinance amount with us, you need to have this amount ready to cover the shortfall on the day of settlement.
For example, if your current loan balance is $250,000 and your new refinance amount is $240,000, you’ll need to cover the shortfall of $10,000. Learn more about shortfall here.
Please note that we do not currently offer a principal reduction feature for our active loans – however, this is coming soon.
This means that currently you’re unable to reduce your minimum monthly repayment by making a lump sum payment to reduce your loan amount. If you wish to make a lump sum payment, you could perform this prior to applying with us.
Here are some ways to reduce your loan amount:
1. Use your redraw balance to make a principal payment
Your redraw amount is separate to your principal balance. If you have an amount in your redraw, you can use it to make a principal repayment towards your OFI loan balance prior to settlement. You can let us know if you intend to keep or use your redraw balance with us or if you will use all or some of it as a principal repayment with your current OFI loan. Learn more about redraw here.
2. Make a savings contribution
Once you’ve determined a savings contribution, you can nominate the amount you would like to pay via your bank account, you can either:
Pay your current lender to reduce the balance of settlement. Please note that this must be done prior to discharge and/or applying with Unloan or
Have the savings contribution amount ready to transfer on the day of settlement for this to go towards your principal reduction in your loan amount, rather than an amount that will go towards your available redraw
If you need to reduce your loan amount prior to submitting your application, please follow this step-by-step guide.
The article does not have regard for the financial situation or needs of any reader and must not be relied upon as financial product advice. As this information has been prepared without considering your objectives, financial situation or needs, you should, before acting on this, consider the appropriateness to your circumstances.