Secured overdrafts
- What is a Secured Overdraft?
- A secured overdraft (similar to a revolving line of credit) is a mortgage that works like the credit limit on a credit card. You can use the full amount up to your limit over and over again, paying it off as you go. The only difference is that the overdraft must be secured against residential property.
- What Secured Overdrafts does QTCU Offer?
- QTCU offers owner-occupied and investment overdrafts.
- How do they work?
- Secured overdrafts work like normal savings accounts with an overdraft limit. You can access your funds using your card through ATMs, EFTPOS, VISA, over the counter, or via BPAY, cheque, Tele-access and NetAccess. Interest is charged daily on the balance of the loan. You pay off the loan in the normal way but may keep redrawing money up to your limit. There is no contracted monthly repayment and therefore you manage the term of the loan.
- What are the benefits of a Secured Overdraft?
- A secured overdraft offers you a lot of freedom and flexibility in how and when you access your funds. Using your VISA card or Redicard you can withdraw funds from the overdraft on the spot using EFTPOS and ATM's, wherever and whenever you need it. Unlike redraw, there is no need to inform QTCU before withdrawing funds. You can also use it with online and phone banking for bill payment.
- Are there other benefits?
- By handling your secured overdraft properly, you can save money. A secured overdraft is a mortgage and an access account, so, depending on the amount of the overdraft, you can receive a rebate of up to $50 on transaction fees. You may also have your pay directly credited into the account, and make extra or lump sum repayments at any time without penalty. Many customers use their credit card for day to day expenses and pay it off each month before interest is charged, this way they can use their pay to save interest on the mortgage each month.
- Will this loan suit me?
- With the freedom of a secured overdraft comes the need to be very disciplined in your budgeting. You must ensure that your overdraft balance is being reduced, in order to start owning your home. There is no doubt that card access makes this mortgage convenient, but if you already use your credit card to its limit, perhaps you'd benefit more from a standard home loan with structured repayments.
A Product Disclosure Statement (PDS) is available for this product and you should read the PDS before making any decisions about the product. As this advice has been prepared without considering your objectives, financial situation or needs, you should, before acting on this advice, consider its appropriateness to your circumstances.
