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Post by stankroenke1 on Mar 16, 2017 21:54:17 GMT
If you take out a Santander unsecured loan of 20k at 3% interest over 5 yrs that's 60 payment of about £354. You put the 20k in here at 12% or more spread it out, then every 6 months or so use the interest paid to pay off the loan. At the end of the term you could make over 14k. this would cost you £100 per month if it went to plan, you would have to cover the repayments until interest was paid, and have some reserve funds in case of late payers etc.
any thoughts on this ?
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Neil_P2PBlog
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Post by Neil_P2PBlog on Mar 16, 2017 22:05:43 GMT
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Liz
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Post by Liz on Mar 16, 2017 22:45:57 GMT
If you take out a Santander unsecured loan of 20k at 3% interest over 5 yrs that's 60 payment of about £354. You put the 20k in here at 12% or more spread it out, then every 6 months or so use the interest paid to pay off the loan. At the end of the term you could make over 14k. this would cost you £100 per month if it went to plan, you would have to cover the repayments until interest was paid, and have some reserve funds in case of late payers etc. any thoughts on this ? You didn't factor in losses, that will happen. 12% is also hard to get nowdays.
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vmail
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Post by vmail on Mar 17, 2017 0:36:38 GMT
You will also find that the bank will say that you cant borrow money to use with investment. You could lie and say you need the money to buy a car, no proof required.
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elliotn
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Post by elliotn on Mar 17, 2017 4:01:08 GMT
You will also find that the bank will say that you cant borrow money to use with investment. You could lie and say you need the money to buy a car, no proof required. P2P risk aside, edging towards defrauding banks would be a whole new level! 
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vmail
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Post by vmail on Mar 17, 2017 8:09:30 GMT
You will also find that the bank will say that you cant borrow money to use with investment. You could lie and say you need the money to buy a car, no proof required. P2P risk aside, edging towards defrauding banks would be a whole new level! That's fine. The banks have been screwing people for many years with their low interest rates for savers.
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elliotn
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Post by elliotn on Mar 17, 2017 8:51:31 GMT
P2P risk aside, edging towards defrauding banks would be a whole new level! That's fine. The banks have been screwing people for many years with their low interest rates for savers. The low rates are driven by the central bank (to balance economic risks), I'm sure banks would like a healthier spread.
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ashtondav
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Post by ashtondav on Mar 17, 2017 8:56:05 GMT
Hang on a mo.
why would a bank lend you money on a car which is guaranteed to depreciate by 10%+ pa, rather than a ratesetter portfolio which, while unlikely to return 10% pa based on their asset liquidation policy, is at least likely to make 8% or 9% pa?
No comprendo.
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vmail
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Post by vmail on Mar 17, 2017 10:28:54 GMT
What's a VCT?
Meh, I thought my 20k credit card was a lot. No idea why I got it, it could be because of my 999 Experian score
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copacetic
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Post by copacetic on Mar 17, 2017 16:08:50 GMT
As others have said you should understand the risks very clearly before attempting to leverage your investments. Consider the worst case scenario of your investments going up in smoke but still being left with the liability of the £20k bank loan - could your salary still cover the repayments and other obligations like rent/mortgage repayments? Also, think about your personal situation and what, if any, financial commitments you have towards family.
A person I know through work took a mortgage out on his house and invested the proceeds (not in p2p). Unfortunately when the financial crash came along it pretty much wiped out his investment. He had to go bankrupt because he couldn't pay the debts and he ended up losing his house. To add to the financial pressure he and his wife had twins shortly after. Eventually after a numer of years he did get back on his feet but it was definitely tough starting over from nothing at 40.
I'm not saying you should or shouldn't leverage your investments. Some people like leopardcat definitely make money from it but you should keep in mind what assets you currently have and what you can afford to lose while you have your eye on potential profits.
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ozboy
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Post by ozboy on Mar 17, 2017 18:03:55 GMT
I think you'd have to be EXTREMELY risk taking to borrow and then bung it all into P2P. It matters not a jot if you "know what you're doing", it's world events, over which you have zero control, that have a bad habit of occurring when you least expect it and subsequently unleashing MASSIVE negative impacts on your investment/s. Obviously doesn't stop some people from doing it though.  |
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