Revolving credit loan (sometimes called line of credit)
Revolving credit loans work like a large overdraft. Your pay goes straight into the account. Bills are paid out of the account only when they are due. By keeping the loan as low as you can at any time, you pay less interest because lenders calculate interest daily.
You can make lump sum repayments and re-draw money up to your limit. Some revolving credit mortgages gradually reduce the credit limit to help you pay off the mortgage.
Application fees on revolving credit home loans can be up to $500. There can be a fee for the day-to-day banking transactions you do through the account.
For:
* If you're well organised, you can pay off the mortgage faster.
* This suits people with uneven income since there are no fixed repayments.
* Putting surplus funds into this account rather than a separate savings account will give bigger interest savings and also avoids the tax on the savings account interest.
Against:
* You need discipline. It can be tempting to spend up to your credit limit and stay in debt longer.
发表于 2010-5-14 19:19:06
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