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Pros of Investing in Stocks with a Personal Loan
Posted on Tuesday, January 3rd, 2023 | By IndusInd Bank
Are you thinking about investing in stocks? The share market can be capital intensive, especially when you are planning to invest in large and mid-cap firms whose share prices are high, needing you to have more money to buy shares. If you have enough cash at your disposal to invest in the stock market, then you are good to go, but if you don’t, then don’t let a lack of funds get in the way of indulging yourself in the share market. You can borrow funds to invest in stocks. Although it’s easy to take a personal loan for any reason, should you take it for investing in stocks? Let’s take a look –
Simply put, it’s all up to you. While some people have no qualms about applying for an instant personal loan for investing in stocks, others oppose it. But there’s something that can help cement your decision.
When it comes to investment in the share market, you need to think like Madhu. Being a working professional, she is the sole earning member of her family. Now in her mid-30s, she desires to diversify her investment portfolio. Although her job takes care of EPF contributions, she wishes to venture into the stock market with affordable funds so that she can get returns in the future.
Although she doesn’t have much savings at the moment, she can afford a monthly EMI of INR 12,000 maximum, at least for the next 5 years. This means that she can avail of a loan of INR 5L, and in easy installments of INR 12,000 for the next 72 months. Let’s find out how this can be beneficial for Madhu.
When you borrow money to invest in the stock market, you would need to pay regular EMIs. With IndusInd Bank, you get flexible tenure options and easy EMIs which you can choose as per your convenience and financial requirement. Using our personal loan EMI calculator, you can ascertain monthly payments for your loan tenure to make a decision.
Since Madhu knew she could afford INR 12,000 as EMI, you need to evaluate the decision yourself. Work around your monthly budget and see how much EMI space you can create for the next few months.
If your shares perform well, they can generate profit to cover the interest portion on your personal loan repayment.
Tax benefits
Since the loan amount gets invested for purchase of assets, you can also avail tax deduction benefits More profit: A loan costs money. But when it comes to investing in the stock market by opting for personal loan, you can close off the EMIs and still end up with profits when your stocks perform well. However, choose your stock options wisely.
Diversify investment
When you take a personal loan with us, you get access to a higher investment amount. You also don’t have to worry about expenses or tap into savings to enjoy high returns from high-cap stock funds.
Higher returns
Using a personal loan for investment makes sense when you earn a higher return than what you pay in interest. Simply put, you earn money on your personal loan!
With multi-purpose, IndusInd Bank’s personal loans are available for as low as 10.49%, coupled with instant approval and quick disbursal. Get in touch with us to know more.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
