Introduction to Loan Redraw

Bank offers redraw facility to provide its customers the flexibility to make additional repayments, while still having access to the additional funds above the scheduled repayment amount when necessary. Banks in return charge its customers in exchange of the redraw service provided. Generally, borrowers pay less interest over the life of the loan as the overpayment made to the loans is used to offset the interest charged on the outstanding balance.

The benefits of this enhancement are:

• Flexibility to redraw money from the advance position without impacting the repayment schedule of the contract
• Ability to limit the maximum redraw per day
• Ability to view the overall redraw information for the customer