Is availing an instant money loan for short-term investment a good idea?
No doubt, this strategy has helped many earn huge profits, but is it suitable for you?
Well, availing a loan to make a short-term investment is a huge risk. But if you have financial wisdom or a great financial mentor, then this could be a very effective strategy to build wealth. Even though market investments closely follow the risk of volatility, the profit-generating opportunities are also immense.
Today, you can easily avail a quick loan through a loan app or bank and use that money to invest in short-term schemes. There are a few things that you need to consider before you opt for borrowing –
- Your loan EMI affordability,
- The interest rate at which you are borrowing,
- The returns that you are expecting to make on the investment,
- The tenure of your loan
- The tenure of your investment
- The goals of your investment
Top Benefits of Financing Short-Term Investments with Personal Loans
Check out the list of benefits that comes with availing a personal loan for short-term investments.
- Short-term utility matches with short-term liability creation
According to one of the first principles of financing, one must match the financing utility with its source in terms of the duration involved. For instance, if the utilisation is short-term, the source of funding should be short-term as well, and vice versa. A quick loan just matches as a suitable source for financing short-term investments for wealth portfolio creation.
- The repayment schedules are flexible
Another benefit that a borrower can avail when using a personal advance for short-term investment is the availability of a flexible repayment schedule. In the case of a quick loan, the loan liability is divided into EMIs payable every month over this tenure. You can choose your repayment schedule as per your repayment capacity.
- The loan is highly affordable
It might take you months to accumulate a sum equal to the loan amount that you are eligible for. But when you avail a quick loan your priorities change. Repaying the loan is a top-shelf priority and you adjust your expenses accordingly. Also, you can negotiate the rate of interest charged on your personal loan. Availing a loan at a low rate of interest could mean higher profit if you choose the right scheme.
- Financing is quickly available
Given that short-term investment decisions are time-critical and the overall success of investing depends on timing your investment decision right as per the market volatility, the easy availability of this quick loan simplifies financing for the purpose. Typically, eligible individuals can receive approval for the loans within a few minutes of application only, with the disbursement of the advance following shortly.
- Financing of high-value allows large corpus creation
Short-term investments carry a possibility of huge corpus creation as the profits are generated out of windfall gains subject to market volatility. Thus, investing a large sum can help maximise profit creation under expert guidance. Thus, an instant money loan can help in the creation of this huge corpus with ease.
- Online availability allows loan access at any time, from anywhere
The online availability of personal loans makes it easier to avail this loan from anywhere and at any time. You do not have to visit the banks or stand in long queues to get this fund. In addition to this, the high transparency allows you to do accurate estimates on the total interest payouts and this helps you choose the investment plan that best suits your need.
- It comes with zero restrictions to end-use
Instant money loans are offered to you by the lender with zero restrictions to end use, which means you can easily utilise them to fulfil your short-term investment needs without any lender-based restrictions.
Things you must remember before applying for a personal loan for investment purpose
- Availing a loan for investment purposes involves high risk. You have to repay the loan irrespective of profit or loss on your investment. So, ditch this idea, if you do not have the capacity to bear losses.
- Financial knowledge is a must for taking such kind of risks. Without the right financial knowledge, there is a huge chance of falling into bad investment schemes.
- Make sure that your calculations are accurate. Check the interest at which you are borrowing and the interest your investment is promising. Consider all the other costs and charges and check if your profit is worth the risk.
Conclusion
The quick loan is available as an unsecured advance and thus needs you to fulfil a handful of eligibility criteria only to avail funding. You must check if you meet all lender requirements or not before applying and also keep all necessary documents ready for easy and fast-tracked processing of your loan application.