A margin loan is a type of investment loan that lets you borrow money to invest in shares, managed funds and other approved financial products.
Using a margin loan to amplify your investing power can be an effective way to build wealth, diversify your portfolio and could offer tax benefits as well.
How does a margin loan work?
A margin loan uses existing shares, managed funds and cash as security.
Interest on a margin loan is calculated daily; but how it is paid will depend
on the loan. Some margin loans allow interest to be paid in advance.
What are some of the benefits?
Boost your investing power - increasing the size of your investments could amplify your profits in a rising market as well as increase the size of any dividend payments
Diversify your portfolio - access to more funds means you could diversify across different asset classes, industries and companies. This in turn could also help reduce investment risk.
Potential tax advantages - depending on your circumstances you may be able to claim tax deductions for some or all of your borrowing costs