Loan Types
Introductory loan
The interest rate is usually low to attract borrowers. Also known as a honeymoon loan, this rate generally lasts only for a few years before it rises. Rates can be fixed or capped. Most revert to the standard rates. These are typified by:
- Usually the lowest available rates
- When payments are made at the introductory rate, the principal can be reduced quickly
- Some lenders provide an offset account against these loans
- Payments usually increase after the introductory period as they revert to the much higher standard variable rate.