Self Managed Super Fund Loans

Self-managed super fund loans

A self-managed super fund loan, or SMSF loan, allows borrowers to use the funds in their SMSF as a deposit to purchase an investment property. This allows Australians to use their SMSF to generate future wealth and access financial opportunities they may not have had before. 

How does an SMSF loan work? 

If you are thinking about taking out a self-managed super fund loan to purchase an investment property, it’s recommended that you seek the advice of a financial professional who specialises in SMSF lending. They can help you navigate the process and ensure your application adheres to all legal requirements. 

Unlike a regular owner-occupied loan, certain criteria must be met to use your SMSF to purchase a property, such as: 

  • The property must meet the ‘sole purpose’ test — that it is being purchased with the sole purpose of generating retirement benefits. 
  • A fund member or related party cannot live in or rent the property.
  • The property cannot be purchased from a fund member or related party. 

Before taking out a self-managed super fund loan, you’ll need to ensure your SMSF will be able to cover your repayments, home insurance and other fees that come with owning a property. 

It’s important to note that not all lenders offer SMSF loans, and the ones that do may charge you higher interest rates. Capta Financial understands the challenges that come with finding the right SMSF loan, which is why we take the time to understand your needs before sourcing the best solution for you.

When should you take out a self-managed super fund loan

There is no definitive answer to this question, as it will depend on the advice given by a trusted professional. As the funds in your SMSF will be responsible for covering all your SMSF loan charges and repayments, you may want to wait until your fund’s balance can cover these expenses. 

What do you need to take out an SMSF loan

The documentation you will need to supply will depend on the lender, though some of the more common pieces of information you may be asked to provide include: 

  • A certified copy of the SMSF Trust Deed
  • A certified copy of the Custodian Trust Deed
  • Three years’ worth of SMSF financial statements 
  • A copy of the contract of sale 

Find the right self-managed super funds loan with Capta Financial

Capta Financial was founded to help everyday Australians make big financial decisions that will benefit them for a lifetime. Whether you’re looking to purchase your first home, add another investment property to your portfolio or refinance, we can support you every step of the way. Contact us today to discuss your SMSF loan options.

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