Anonymous
Should i take up a personal loan to invest more?
- I have a year of annual income saved in my bank that is accruing interest.
- I have a set amount of additional income + variables that will be coming in for at least another 12 months.
- I draw a full time pay on top of no.2
What I intend to do is to get a loan of about 5-6% int p.a and return them in 12 mth, while I invest the full amt into a diversified investment (part stock part p2pL) which gives me 9-12% p.a. (with risk involve)
What would the pros and con be?
Thanks so much guys!
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P2P is a high risk investment which you should expect 10-20% default rate (to be conservative).
Unless you are already generating consistent profits for quite some years using the same method (which I don't you do), it is always not advisable to fund your investment with loans.
Lastly, 4-6% additional profit doesn't justify the risk involved for such investment.
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If you are absolutely sure that your investment can give you that 9-12%, then sure, why not?
Howeve...
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I won't recommend taking up a loan to invest via P2P as there is possible default risk...