What you need to know when getting an online home loan

PHOTO: Online Home Loans

Online home loans are offered by banks and lenders that do not have branch access or employ staff to meet with customers in person.

More often than not, the trade-off is getting cheaper interest rates and paying lower ongoing fees.

While most banks and lenders are governed by the Australian Prudential Regulation Authority (APRA), some online lenders are not governed by the APRA.

Nonetheless, all online lenders must adhere to a set of guidelines by the Australian Securities and Investments Commission (ASIC) which means, though you won’t have any in-person banking service, you will still have consumer protection rights which includes the right to make a complaint through the Australian Financial Complaints Authority (AFCA)

There are a growing number of online lenders in the Australian market, the main ones being Click Loans (3.76 per cent comparison rate per annum), ME Bank (3.44 per cent), State Custodians (2.85 per cent), UBank (2.84 per cent), Tic:Toc (2.8 per cent) Australian Mortage Marketplace (AMM), and loans.com.au (2.8 per cent) to name a few.

Like most home loans, online home loans require applicants to submit paperwork proving their eligibility for a loan.