This isn't really a question for SFE so I've put it in everyday issues on the basis of financial issues... So I've figured out that if I'm careful I can take a loan for 2k less than the maximum I can get but I've been considering the concept of taking the extra 2k and adding it to my stocks and shares ISA investment... Or even a Peer to Peer investment ... Is this something that is allowed? And would it be likely to generate better interest/returns over years in theory that justify not borrowing the money and not having to pay it back with interest... Any opinions on the topic would be much appreciated c:
Would investing my student loan be legal and logical? Watch
- Thread Starter
- 22-07-2017 20:01
- 22-07-2017 20:14
Sure just don't disclose where the money is from. Your money, your business.
- 22-07-2017 23:25
Student loans will cost you 4.6% in interest per year. With this amount of interest it'd only eat into your profits, so unless you'll make a net return of > 6% on whatever you want to invest in, I wouldn't bother. Especially if we're talking 1%~ profit over a tiny investment like 2k, you'll just break even after inflation is factored in but a load of debt to manage. This is a question of Gearing and you'd have a very high gearing ratio which is generally quite unhealthy. Leverage is a great method of increasing your capital but it has its risks. I think this is exactly the type of textbook scenario where it'd be a bad idea to leverage.