There are many instances when a loan will not be approved with a bank. There are usually good alternatives. Normally, the interest rates and the fees are quite a bit higher than a bank loan, but this is offset with some impressive advantages. And most short term loans have GST activity, so the cost of funding would likewise be tax deductable.
Short Term Lending
Most non-bank loans are suitable for short term lending such as bridging or speculative (spec) builds. Most loans will not exceed 12 months. There is no prepayment penalty or hidden fees. Your loan offer and all fees will be disclosed to you in full on approval.
No income verification
Another advantage is that non-bank funders are far more interested in equity rather than serviceability. This is exactly the opposite to banks which makes this a nice complimentary product for todays risk adverse banks. No income evidence is required, although there may be some requirement to show you are capable of making the interest payments.
Inherent Value/Equity
The banks have a credit policy that states they will only accept the lessor of the purchase price or valuation. That means any inherent value (the difference between your cost and the valuation) can’t be used as part of your deposit. With our non-bank lender, in most instances, it can be.
| Floating | 5.75% |
| 6 Months | 5.75% |
| 1 Year | 5.25% |
| 2 Years | 5.55% |
| 3 Years | 5.75% |
| 4 Years | 6.10% |
| 5 Years | 6.50% |
My wife and I wanted to build a new home. We had never undertaken a house build before and heard lots of horror stories from friends about how it can all go wrong! On the recommendation of our builder we contacted NewBuild to arrange our finance. Our experience with New Build from start to finish has been nothing but professional, friendly , helpful and on time.
On the last day when some paperwork hadn’t caught up with the house build NewBuild helped to get over the last hurdle and get us into our new home.
A big thanks to Ian and the Team at NewBuild. We will definitely be seeing you again when we do the next one!
Chris and Donna Evans
(Completed with Jenian Homes (Waikato))