What fees are payable on a renovation loan?

If you’re in the market for a renovation loan, you probably already know you’ll have to pay interest to your lender. But what about those hidden costs that can catch you off-guard? Shopping around for a renovation loan with fewer fees can save you thousands in the long run. 

Here are some of the extra charges that could apply to your renovation loan:

• Establishment/upfront fee: You could be charged a fee when you apply for a renovation loan to cover the cost of assessing your application and preparing loan documents.
• Service fee: Monthly account keeping fees add up over time. It’s worth calculating the total cost for the life of the loan so you’re not caught by surprise.
  
• Late payment fee: Your lender may charge a fee if you default on your loan or miss a payment.
  
• Early repayment fee: Do you hope to pay your loan off sooner? Seek out a lender who doesn’t charge an early repayment fee so you’re not penalised for your stellar efforts.
  
• Other fees: Check out the terms and conditions of your loan for a full list of fees and charges.
  

At Plenti, we believe in tailoring unsecured renovation loans to suit your unique financial situation and lifestyle. This means rewarding your strong credit history with attractive rates that are personalised to you and offering the flexibility to pay it back faster. In fact, we’ll never charge you fees or penalties for paying your loan back early. 

It’s your life. You’re in control. 

Hot tip!

Comparison rates do the hard maths for you by rolling together the interest rate, upfront fee and service fee into one percentage figure. This means the comparison rate will be higher than the interest rate charged on the loan. In Australia, lenders are required to show a comparison rate when they advertise an interest rate.  

For renovation loans, there is a standardised measure for how comparison rates are calculated:

• For renovation loans 3 years and under comparison rates are calculated on a $10,000 loan amount over 36 months.
• For renovation loans 4 years and over comparison rates are calculated on a $30,000 loan amount over 60 months.
  

It’s a helpful tool when researching the cost of the loan. But remember, a comparison rate doesn’t include early repayment fees, late repayment fees or deferred establishment fees. 

Refer to the terms and conditions of your loan if you’re unsure about these extra charges.