Document background
The Interest Only Loan Agreement is a crucial financial instrument widely used in Australian lending practices, particularly in real estate financing, investment property purchases, and business funding scenarios. This document is essential when parties wish to establish a lending arrangement where the borrower pays only interest for a set period, typically ranging from 1 to 5 years, before transitioning to principal and interest payments or refinancing. The agreement must comply with Australian federal and state legislation, including the National Consumer Credit Protection Act 2009 and relevant state-based contract laws. It is commonly used by financial institutions, private lenders, and investment companies, requiring careful consideration of security arrangements, borrower capacity assessment, and regulatory compliance. The document includes comprehensive terms covering interest calculations, payment schedules, default provisions, and security arrangements, making it suitable for both commercial and consumer lending contexts within the Australian jurisdiction.
