Investment credits? One of the great problems of investing in the stock market derives from the situations in which the positions taken are in losses and can even be very marked. Not only because of the decrease in equity, but because it may be that you need to rescue the contributions to face some urgent expenses: meet your tax obligations, pay the rental fee for the apartment, or directly face a disbursement not foreseen in your budget.
Faced with this scenario, there are few options that you can avail yourself of. Either you sell the shares with a handicap, or on the contrary, you try to find other more satisfactory alternatives for your interests. From your point of view as a small investor, from now on you have a solution that can help you in these cases, and it is convenient for you to know it. It is about welcoming one of the investment credits that have made the banking entities.
Investment credits are a financing product that grants you money to prevent you from making a lousy operation in equity markets. They are developed with contracting conditions that do not differ excessively from other different sources of financing. The maximum amounts that they provide to their applicants are not really very expansive. But at least it will help you don't have to undo positions in the markets in the worst moments of investment.
How are these credits?
In the current bank offer, many lines of credit of these characteristics are not contemplated. On the contrary, they are very specific proposals that do not reflect a majority trend in the banks' strategy. And that as usual in these cases will suppose you some interests that will have to be added to the operation. Ultimately, it is about holding on to your positions on the stock market until the evolution of their prices scope - at a minimum - the purchase price, and do not have to sell them before this unpleasant situation.
They not only serve to protect trades on the stock market, but also other equity derivatives (investment funds, warrants, credit sales, etc.). The banks will not require any guarantee for their concession, but the guarantee of the operation will be represented by the investment itself. For this you have very flexible repayment terms, which can be adapted to the needs you have, and which are different in each case.
Under this general scenario, the proposals you have at the moment are based on very specific models. One of them is the Investment Loan that Bankia has been in charge of marketing for users in this situation. It is characterized by the fact that you choose the interest rate to which the financing method is linked. It can be fixed or variable, depending on your needs, and of course, the profile you present as a client. And where they even give you the possibility of paying 14 annual installments to speed up the process.
Another option that you can take advantage of comes from the Investment Credit that Deutsche Bank has developed. In this case, you will have to assume more benevolent interests, being able to close the operation within a maximum period of 10 years. And that it is maintained with conditions in the same line as those expressed in the most common characteristics of this banking product.
What are these credits for?
The purpose of these financing channels are very specific, and you must know when to demand them, and most importantly, what are the most likely situations for you to contract this kind of special credits. It will be what differentiates it from other lines of financing. And that you can basically formalize them in the following scenarios.
- At the precise moment that you need liquidity to face an urgent payment, but have your savings invested in equities, and on top of that, losing money in open positions.
- When even rising in the price quote, it is not worth it to finalize the operation since you think that your savings can be revalued even more.
- When you do not have the necessary resources as to face the expenses that come to you in the coming months.
- To get any tax advantage of your positions, not only in variable income, but also in fixed income, and even in other alternative models for investment.
- In situations where you have to adjust the expiration of the products that you have subscribed to make the savings profitable, and that therefore, you will not be able to sell under the conditions that you initially wanted.
- When finally your option not to sell the investments is a more profitable operation, and from which you can get many more benefits, more than you think.
What will their hiring mean to you?
The subscription of the credits for the investment will suppose you a series of expenses in its management and maintenance that you will have to assess to verify if it is really worth making this demand to the bank. Not in vain, it will mean additional disbursements that will affect the balance of your checking account. Do you want to know them?
- They will apply a type of interest which in all cases exceeds the 7% barrier, and which you will have to face during the next few months, and until you close the operation.
- The possible commissions that may entail the formalization of this product, and that in the worst case can rise up to 3% of the amount demanded.
- The increase in level of indebtedness As long as you have activated the granting of this financing, with a monthly installment system that will make you better adjust to the family budget.
- Any breach in payments will mean a severe penalties that will make you spend more money than initially budgeted. Being able to create more than one problem.
- By contrast, they have no costs for their management or maintenance, but in any case it will be very convenient for you to read the fine print of the contract to detect any hidden disbursement, and its real amount.
The requirements of the banks
As in all kinds of credits, they will require guarantees to grant it. They are in the same line of another class of loans. In most cases it will be completely necessary for you to contribute a payroll (pension), or at least a regular income. It will also help you that you do not have other lines of credit contracted, both in your entity and in other banks. And if you can support your candidacy with a solvent and healthy checking account, then the better for your interests.
On the other hand it will also be very important that you are not included in any list of defaulters (ASNEF, RAI or similar). Since if so, you will have no choice but to look for other financing options since they will reject your application with all security. Even in the financial platforms for granting fast loans. Therefore, it is convenient for you not to have debts with the banks, but not with the state, and even with the main services for the home (electricity, water, gas, etc.).
And of course, that you detect that you really need this money. Do not do it by mere imposition, not even to avoid facing more expenses from your checking account. Since you were only going to increase them. And what it is but, in the most unnecessary way. Your demand should only be channeled in the most urgent situations in your domestic economy, not in others.
What goals can you achieve?
Through this financing operation you can achieve the desired objectives, and it may even be profitable for you. Although not in all cases it develops in this way. To know that you have been successful in granting this credit, you will have no choice but to analyze its final consequences.
- When you have obtained the concession of the credit under better contracting conditions, and even exempt from commissions and other expenses in its management or maintenance.
- At the moment when the evolution of your positions in equities (or fixed) I have met your expectations, to the point that capital gains have been permanently installed in your investment portfolio.
- Through the dividend collection open positions on the stock market. And that can offer a fixed and guaranteed return of up to 8%,
- As long as the performance of your investments exceed expenses which will mean assuming the interest rate that the banks will apply to you for granting this credit.
- In trying to minimize worst-case scenarios in financial markets, all indices are caught in bearish movements of great draft.
- And last as long as do not suppose you to raise the level of indebtedness in a dangerous way, to the point that the general state of your personal accounts may be jeopardized.
Tips
They are credits that you should only use on very specific occasions. Under no circumstances abuse your demand, even if things were very bad in the equity markets. Do not forget that you have other more satisfactory alternatives to solve this investment problem that you have at a certain time.
Among these alternatives to financing you can opt for the credits between individuals. With more beneficial conditions for your interests, since they entail less expenses in its processing. And without forgetting that a family member can always help you out of this problem that the investment of your savings generates.
In any case, it will be essential that you analyze the term to which your savings are directed: short, medium and long. Depending on them, the strategy you should use will vary substantially in terms of the demand for a line of credit.