Reasons Why Australians Are Increasingly Taking Out Stock Loans in 2021
September 13, 2021
Buying an exclusive luxury state, purchasing a corporate helicopter, private jet or a luxury yacht, building a business or personal cash reserves, investing in real estate ventures, consolidating debt, arranging working capital for a closely held business… there are several reasons why people take out loans.
However, there are several potential pitfalls involved within the realm of money-borrowing, which is why it’s essential to navigate the world of loans with caution. Although there are countless types of loans that people can seek, some have lesser risk and fewer drawbacks than others.
Keeping this in mind, many Australians opt for stock loans that offer unparalleled flexibility and minimal credit risk, among others. Interested? Here’s all you need to know.
Stock Loans 101
Stock loans are a type of loan that’s generated against the value of the shares of stock one owns. The lender will provide the loan based on a portion of the stock’s value that has been designated as collateral for the loan. Typically, credible lenders offer loans up to 70%-80% of the total value of shares, but it mainly depends on an analysis of the volatility and other factors pertaining to the underlying security.
Why Stock Loans?
People in Australia, and several other countries across the globe, are increasingly relying on credible non-recourse stock loan providers, such as K.N Horton Financials, to access liquid funding. We offer premier stock loans starting from $1 million up to $500 million without stringent credit checks at low-interest rates.
When you trust us to finance your dreams, we don’t require you to provide business or personal financials or share your investment profits. But there are more reasons why Australians are increasingly taking out loans in 2021.
When someone borrows money through conventional, credit-based methods, it usually comes with certain restrictions about what the money can and cannot be used for. If you get an auto loan, the money you acquire remains for the specific purpose and would be regulated as such. But with stock-based loans, the borrowed money can be utilized for almost anything.
Low And Fixed Interest Rates
Interest rates of loans taken through banks are relatively high, with a tendency to fluctuate. Stock loans not only offer a much lower interest rate, comparatively, but they also come with a fixed interest rate. It helps get a complete picture of what to expect from the financial commitment they’re entering and allows them to prepare adequately beforehand.
What Happens If The Stock Appreciates?
Stock trading is a fickle game. The Australian stock market goes through constant fluctuations. If you’re planning to borrow against a stock that you may think appreciate, a non-recourse agreement can help you enjoy the benefit while utilizing the funds for your personal or commercial projects. Even if the value plummets, you can relinquish the stocks while maintaining the money borrowed against them. We also offer the option of terminating the loan with no harm to the credit score or backlash.
Want to learn more about our services or seek advice regarding the best course for acquiring non-recourse loans, high-net-worth loans and personal loans for yacht financing, private jet loans, commercial funding, and more in the Philippines, Malaysia, Singapore, New Zealand, Japan, Australia, South Africa, and Indonesia among others? Schedule a consultation with us.
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