1. What are the benefits of prepaying interest?

• Competitive interest rate - saves you money.
• Locked in interest rate – guards against interest rate rises.
• Tax effective - you may be able to claim a tax deduction on the prepaid interest, in the current financial year when they need it, rather than the following financial year.
• Better cash flow management - easier to budget the costs associated with your geared investment.

2. Can I cancel a prepayment?

No, once the prepayment quote is approved and payment is received a prepayment is not able to be cancelled or reversed. Prepaid interest is not refundable in any circumstances.

3. How do I create a prepaid interest quote online?

1. Login to BT Online. (If you don’t have a password call BT Margin Lending on 1800 816 222 and get a password over the phone)
2. Click on the BT Margin Loan you wish to prepay the interest on
3. Select “Prepaid Calculator” on the left hand menu
   1. Enter the name you wish to appear on the quote
   2. Select the date the prepaid interest term should start
   3. Select the term of the prepayment (3, 6, 9 or 12 months) and click next
   4. Choose to either specify the loan balance you want to lock in or the interest amount you wish to pay in advance and click next
   5. Choose a payment method (cheque/BPAY® or using available funds or a combination of both as long as it adds up to the specified amount. If you have a Cash Management Trust (CMT), you have the option to balance your loan with your CMT) and click next
4. Once you have checked the quote, save it as a pdf and submit online.
5. Alternatively you can either email it or print and sign the quote then either fax or mail it to BT Margin Lending.
6. Arrange payment before 12:00 midday on the date the prepayment term commences.

4. What options are there to get the quote to BT Margin Lending?

A signed quote can be sent to BT Margin Lending via either:

5. What payment methods can you use to prepay your interest?

Prepayment payment options;

• Available margin loan funds
• BPAY^®
• Direct Debit from your nominated bank account
• By cheque
• Direct credit to BT
• Compounding interest on your margin loan
• Cash Management Trust (CMT)

6. When is a prepayment quote and payment due to BT Margin Lending?

All approved prepayment quotes (and payment) must be received before 12:00 midday (EST) on the date the prepayment term commences. For example, if your current prepaid term finishes on 19 June 2008, then the next term will commence on 20 June 2008. The approved quote (and payment) must be received for processing by 12:00 midday on 20 June 2008.

NOTE: All quotes and payments are due by 12:00 midday (EST) on Monday 30 June.

7. Can I go into the buffer to make the prepaid interest payment?

You must have the full amount of the prepaid interest due in your available funds on the start date of the prepayment term.

8. What happens if BT Margin Lending do not receive the prepaid interest amount on time?

The default payment method is set as “Available Funds” therefore if we have received an approved prepayment quote from you, and we have not yet received payment the whole amount will be added to the loan amount.

The only time this will not happen is if you have insufficient funds available in your loan to cover the entire amount – if we increased the loan by the prepaid amount it would put you into the buffer. If this happens, we will not process the prepayment quote and standard variable interest will be applied.

9. How will I know that my prepayment has been processed?

You will receive confirmation via your monthly statement. Alternatively you can call BT Margin Lending on 1800 816 222.

10. When will the June prepayment interest rate be released?

We release rates based on the dates that the board of the Reserve Bank of Australia (RBA) meets.

• June - released 4 June 2008.

11. What are the last dates BT Margin Lending will accept new loans so you are able to draw down the loan to prepay the interest in the current financial year?

12. When will you receive your tax statement, otherwise known as a "Statement of Interest" from BT Margin Lending?

You will receive your "Statement of Interest" by mail within the first 10 business days of July 2008.

13. When will you start receiving your tax statements for your Managed Fund Holdings?

Each Fund Manager sends the tax statements to clients at different times. Generally the Fund Managers send the tax statements to their clients between the months of August to September. Information may be available on the relevant fund manager’s website.

14. What are BT Margin Lending’s contact details?

<<Back to top