FinanceTeam

Are my Repayments Fixed?

Most types of loans need to be repayed on a monthly basis. There may be some flexibility where the lender may allow over-payments and lump-sum repayments, both of which benefit you by clearing the debt over a reduced time period. If the loan you have is a true flexible loan product then it is possible that you may be able to draw down additional funds from the account on a repeated basis, provided you remain within your agreed credit limit. Some lenders also offer the option of a repayment holiday or repayment pause. This allows you to take a break from the normal monthly repayments. This can be at the start of the loan (commonly referred to as 'deferred repayment') or at some mutually agreed date within the term. The interest will continue to be charged on the outstanding balance and as a result this could result in higher monthly repayments at a future date. This is to allow your loan to be repaid over the term that was agreed when you took out the loan. You should always check with your lender whether the interest rate applicable to the loan is fixed at the outset or is variable over the term.