Budget loans have the following features: The full amount of the loan does not have to be drawn

n down at the start of the l oan. Drawdowns are allowed at any time up to the credit limit. Interest is calculated on the outstanding principal from the date of the drawdow n. Interest is capitalised to the outstanding principal balance of the loan account on each settlement date. Discounted loans A discounted loan is a loan for which the interest is subtracted from the princi pal at the start of the loan. The full principal is repayable in a single payment at maturity. The i nterest rate set for the loan determines the amount of the discount. On the day prior to maturity, the value of interest over the period to date is c apitalised into the outstanding principal balance and the value of the loan interest due over the lo an to date is updated