Loan for Investments
March 4, 2019
With an investment, many hope for a very good profit. However, the market shows that there must always be a certain amount of investment money for the profitable investments.
Not infrequently, there are a few thousand euros, which demand the banks, so that the capital investment can even be opened / closed.
And not all could save that money. So many think about a loan for investment. First of all, this paradoxical, expensive lending interest sounds to pay to use an investment. But it can be really worthwhile taking out a loan.
The decisive factor is what kind of capital investment should be used. One who is settled in the area of the daily or fixed income, will not bring the desired profit, so that here it can be said that it may not be a worthwhile decision. With other investments, however, it can be to the advantage of investors to finance them by credit.
Is borrowing worthwhile for an investment?
An example is your own property. This can always be financed by credit, and it will turn out to be worthwhile. Since there is already a benefit from living in the loan period, it is not alone decisive that a profit is made with the property at a sale. Even if the property is to be rented, can be expected with the rental income.
Furthermore, the lending rates for a rented property tax deductible, which again speaks for a loan for the property as an investment. Real estate is considered a safe investment. The loss, with them, even at a sale, are quite low.
Disadvantages of the loan for an investment
It is different with other forms of capital investment. So stocks, securities are always very welcome financial transactions. Investors hope for a very high profit, which can be achieved. On the other hand, the risk of loss is just as great. Not only from the perspective that no profit can be made, but that the capital stock is also gone, makes the investment but very risky.
And here, no credit should be taken for the investment. Also, if securities and stocks persist over a longer period of time, say 15 years, and the loan has a maturity of 3 years, then those who want to make a profit from investing should prefer to be safe.