Interest-Only Loans vs Principal & Interest Loans

Interest-only loans vs principal and interest loans: The pros and cons

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You’ve heard so much from so many people about how investing is the key to financial freedom. It’s how you build generational wealth…

And you want to get started.

You head online to look at some loans and find that there are so many options. There’s a huge amount of information to unpack before you choose the loan that’s right for you.

However, it all starts with one question…
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Do you go for a principal and interest (P&I) or interest-only loan?

Each has its pros and cons.

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Principal and Interest

With a P&I loan, every repayment that you make takes a small chunk out of the loan’s principal….

…That’s the first benefit as it means you’re making active progress towards reducing the loan amount.

You’re going to have to do this eventually, even if you get an interest-only loan. The key question is whether you should do it from the start.

We’ve found P&I loans tend to come with slightly lower interest rates.

But despite that, they’re going to have a major impact on your cash flow if you use them from year one.

The loan’s going to cost you more in repayments simply because you’re adding the principal on top of the interest.
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Interest-Only

As the name says, this type of loan sees you paying only the interest for a set period of time…. 

…After that, it reverts to a P&I loan.

The great thing here is that you reduce your immediate expenditures. 

This means you have more control over your cash flow immediately after buying an investment property.

However, you’ll also have a shorter amount of time to pay off the principal when your loan reverts to P&I.

That’s where Dashdot’s high-performance property strategy comes in.
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We can help you find high yield and high growth properties that offer value adds.

That’s going to help you build even more equity during the interest-only portion of the loan…

…So when it reverts to P&I, you’re in a much better position.

We want to help you to leverage this strategy.

Take our 15-second application to find out if we’re a good fit.
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“Thanks to Goose and Gabi, I was able to clearly understand the strategy required to set me on a path to financial freedom. This strategy has become an action plan, and their ability to find the perfect deals to suit my goals is absolutely amazing. I can’t thank them enough!”
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“The knowledge, care, and guidance provided by Gabi and Goose gives us every confidence that we will be able to replace our income in the next 5 years”

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“Analysis Paralysis was stopping us from taking the next steps, even though we both talked about how we never felt we’d get out of the ‘rat race’. Thanks to dashdot, we’re finally on that journey to the life we’ve been dreaming of!”
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“I always thought I knew what I was doing when it came to property investing, but after working with dashdot, I realised I was only ever speculating… These guys have really shown me what it means to invest intelligently, and to make a property work from day one”
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“I’d pretty much resigned to the fact that I would never own a home, let alone an investment property portfolio. Dashdot helped me come up with a strategy that will help me leapfrog into buying multiple properties in only a few years. I feel like my whole future has changed – I couldn’t be more excited!!”
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