Hi All,

Is getting a personal loan an dumping them in CAREFULLY selected stocks & mutual funds a great idea? I've been researching and considering since the major big fall last Oct 08...

Recently, I've been doing a lil asking a round for a suitable PLoan... it seems that if i take a RM 30k loan (5-7 yrs loan tenure).. i will in the end have to pay about (lowest int) RM 44 xxx or was it RM45 xxx... anyways.. it means that i have to make a 50% profit from my 30k initial investment to cover my int.. so what do u guys think?? altho the recent rally has pushed up alot of prices... SHOULD a correction happen .. and stocks go tumbling bac to their las few months pricing ... u guys think its wise or only a mad man would do it...

Thank you..

Basically several question you need to ask.
What is the odd chance of your share make more than 50% in 5 years time?

What is carefully selected stocks? How do you know the stocks are "carefully selected"?

I offered several scenario that potential happen after 5 years.

1. Stock up more than 50%, so you have a net gain from it. OK, congratulation.

2. Stock up 50%, you are working for banks with high risk you are taking. You gain nothing out of it. You become the slave of the banks which working free and generate profit to the bank.

3. Stock up less than 50%, you have a net loss and gain in stock not enough to cover the interest

4. Stock doesn't move, ended up with loss of interest

5. Stock goes down, doom, double loss = loss of interest + loss of capital

Ordinary people using cash to buy stocks, they just need to make sure the stocks making a gain more than FD rate is considered a gain already. While for you using loan money, you need the double effort.

If you don't know what you are doing, sorry, no go is my advice.
As if you know, you won't be asking this question already. No offence.

Using margin or loan money to make investment, unless one is making calculated move and anticipating potential risk of it, otherwise, my opinion is better don't, as it just means you don't know what is the risk you are taking.

My 2cents.

This post has been edited by cherroy: Apr 25 2009, 10:42 AM

i wan to ask also .

any sifu know if loan Rm10K for 1 year tenure.
how much totally i need to pay end of tenure ?

Isn't personal loan interest rate is higher than share margin financing interest rate?
Maybe you want to check out this thread. http://forum.lowyat.net/topic/613854

Just remember that by playing stocks, you can earn good money. However, you can also lose your hard earned money too.

For me, I don't want to take too much risk and only buy shares only with my spare cash......

Personal loan interest are just way too high, anything more than 6% is no good for me.

Madness and greed i think . you think getting high return is so easy??I can say getting an annual return of more than 8% is very difficult.....If everybody do like that then i think NPL in malaysia bank will rise very soon ...

Got one tips for you... if you got housing loan maybe top up your housing loan and do investment the interest are very low at thwe moment about 3 - 4% and i foresee the interest will stay at this low level at least for the next 5 years or longer as our government don want our rm to appreciate against other currency as it will affect our export....

Being an investor every single 0.1% count .... but you seems don concern about that. you must know that the 1% difference ARE all $$$$

try to love every single cent you have before you invest if you don love money.. money will not love you

for me , i just wan to know how high is the RATE for loan., which make everyone disagree to loan for share invest.
and what is BLR ???
from the topic opener stated, 50% for 5 years, equal to 10% annually ?
if like that, it is bit high.

by the way , if loan for bussiness ? is the rate high also ? bussiness got risk or not ?
just a question to get opinion. no attack

This post has been edited by salvationme: Apr 26 2009, 09:44 AM

personal loan is around 8-12%(CIMB's flexicash is BLR + 6.1% = 11.65%) annually, business loan i dont know.

BLR = Basic Lending Rate

A loan's interest is usually high if you got nothing to lose(like house or car) if you cannot repay the loan.

By the way,
personal loan from bank are not as easy to get as you think, unless you can proof you can pay the monthly installment why would the bank lend you money?

If you really want to get a loan, you should do what darkknight81 said,
refinance your house, the interest is a lot lower , around BLR-2%

Just one word: AVOID

yeap abit too crazyyy watch movie also alot d die because of this

11.65% ?
FD only 2.00+ % for us. but loan 11.00+% for them
sure win sure win.

Business loan has the lowest rate among all the loan if you manage to secure a loan from the government SME program.
For business loan you must meet the business criteria . Starting you must start up your business 1st.
When you starting your business, you wouldn't want to use your capital or the loan you secured for stock investing would you.

For your question regarding Ploan.
Please assume the worst case scenario will happen.
Are able to live a comfortable lifestyle while you repay the loan.
If you cant, better rethink.

My dua sen.

Thank you all... the tot of wanting to capitalize in such a troubled time jus got the better of me, i guess.. Its good to have a forum like tis... u get plenty of opnions.. hahaha..

V Risky. You'd be making money for the bank instead.....

my 2.5sen....

stupid idea. Better you save a portion of your salary each month and nibble at some stocks every month if you want to start dabbling in the market. Taking a Personal loan... the risk is way too much although in a bull market you may just about make it but bulls dont run forever... normally its when greed takes over... the bears rears their head... BOOM!