To invest with a securities credit

Borrowing to invest?

Borrowing to invest?

Define the risk profile

Is taking out a loan to invest a good choice? And where can you apply for such a loan? To answer the first question: it is risky to borrow money for an investment. Banks therefore work with a risk profile. You must indicate in advance what risk you want to run with your investment. In this way it is clear to both parties (the bank and you) where you want to invest the money.

By answering a number of questions online, your choice is recorded. For example, you may be asked what your main objective is to invest? Is that just capital growth or is it a necessary supplement to income? How do you react in the event of a sharp fall in prices? What loss are you willing to accept? A portion of your money or all your stake?


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Securities credit

With a securities credit, your shares are given as collateral to the bank. As a result, the bank has certainty that they will get back a certain amount of the borrowed money. As long as the value of the shares is higher than the loan, nothing is wrong. However, if the prices fall and your securities portfolio is worth less than the loan, the bank can signal that money needs to be added. If you cannot deposit additional money, the bank can decide to sell the securities portfolio (in part). It is quite possible that you will be left behind with a considerable loss.

How much can I borrow to invest?

How much can I borrow to invest?

This depends on your personal situation. First of all, your spending space is important. Are you single or do you have a family? What is your source of income? Payroll service, benefit or benefit? Do you have a rental house or a house for sale? Does your partner also have income and is this calculated to apply for a loan? If you have a large spending margin, the interest on the loan can be low (5%). If it is less easy to pay off, the bank runs a higher risk. You have to pay a higher interest rate that can rise to more than 10%.


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