Of course, there are many kinds of credits, to finance purchases, to buy a vehicle, to reform the home, or even to finance computer equipment. But of course one of the most unique that banking entities have implemented is the one that aims to pay for investment operations of its plaintiffs. A new variant in the sector that opens many doors to people, who, as in your case, are in permanent contact with the stock markets.
This new scenario to access this line of credit can be very useful to develop operations in the financial markets. And even thanks to this, you may be able to amortize the interest rate that they apply through an excellent operation in equities. Of course they are not free, since They are marketed with commissions in line with those imposed on this class of banking products. And to which is added the possible commissions that it entails in its contracting clauses.
As it is a new credit modality, at first you may not know what this very special line of financing consists of, and especially what credit formats you can use at the moment in the current bank offer. Well, they are not yet commercialized in a majority way, far from it, but they are limited to very specific proposals that the entities have been doing to satisfy the demand of their clients.
From this general perspective, there are greater possibilities for you to invest in the equity markets. With several applications, which in any case you should know in case from now on you are forced to demand any of these products for investment. Although the main thing in this particular case will be that the operation is profitable. No more no less.
How can they be used?
The usefulness of these credits can have different purposes, as you can see in this article. How many times have you been unable to access the stock markets due to not having enough liquidity in your checking account? It will be the first option, although as long as you support the formalization of this financing route. Either because you have the capital invested in those moments, you are at the expense of unexpected income, or you simply have it destined for other purposes.
These banking products mean that they are used in two clearly defined scenarios. On the one hand, for do not sell your positions in the markets. Not only in the stock market, but in other investment designs (funds, derivatives, warrants, etc.). And on the other, to take advantage of the benign market conditions, where real buying opportunities arise with some regularity. And before any need, you do not have enough liquidity to open the positions.
However, they are not very expansive models in terms of the maximum amount they offer you. They grant up to approximately 30.000 euros. Although in return, they generate more favorable contracting conditions, where no guarantees or other types of guarantees are necessary. It will be enough with that of the own products that you have contracted, whatever it was, and even if they are of a different nature.
They are marketed under one interest rate that oscillates under a range between 8% and 15%. And to which you can add the commissions that may be presented in each model. Among them, the study, opening and early cancellation. And that as a whole can reach up to 3% on the balance provided in its concession.
Credits offered by banks
The bank offer may not be as powerful as you'd like. But at least you will have a very effective tool to achieve your goals. One of the proposals comes from Bankia, which has chosen the Investment Loan for these occasions. It allows you to allocate your resources to try to optimize a good operation in the stock markets. It is a credit that is governed by traditional canons, and that is characterized only because you can choose the interest rate, either variable or fixed, depending on your specific needs. And that to have a better amortization, it opens the possibility that you can extend the monthly payments up to 14 times a year.
However, if what you want is to hire a more competitive interest rate to soften the debt, you can opt for the Investment Loan that Deutsche Bank has developed. And return it within a maximum period of up to 10 years, as the main hallmarks of this banking product.
The possibilities of finding more proposals of these characteristics are not yet exhausted. Because under similar conditions in your hiring, Citibank grants you another alternative to obtain economic resources through the Investment Guarantee Credit. Whose main uniqueness lies in the fact that their interest rates are linked not to any variable interest rate, but to the European benchmark, the well-known Euribor.
When should you perform the operation?
These credits are enabled so that you have sufficient liquidity to not miss a good opportunity to buy equities. You will not be short of options, even this year. But it does not force you to carry out your hiring out of mere obligation, since it can trigger the level of indebtedness that you can assume based on your regular income. You must be very responsible to channel this process.
To facilitate the operation, you will have no choice but to assume a series of behavioral guidelines to optimize the operation. And certainly not an economic burden that you have to regret over the next few months. Keep in mind that you will have to return the amount plus the corresponding interest, and within the agreed deadlines. And maybe for many years. Do not forget about these requirements before signing the contract.
First key: hire it with guarantees
It performs the operation whenever is backed by your usual income, and in cases, for example, that prevent you from making a bad sale of the shares with abundant losses. Only in this very specific scenario will the contracting of one of these banking products be favorable. Not in vain, you can even save money, once the interest payment and its commissions have been discounted. On the other hand, if you are in a bad financial situation, it is not recommended that you execute the request, since it could drown your bank balance for a long time.
Second key: analyze all your conditions
It should not be formalized without a prior study of all its characteristics. Yes you can, you should avoid any kind of additional expense (commissions, fees, penalties, etc.). And within the current bank offer, opt for investment credits that carry the most competitive interests in the market, as it will help you make the investment profitable. There are probably many euros that are at stake, and before this you should think about whether or not its acceptance is convenient.
Third key: under a profitable operation
If it is feasible that your investments are going to give you an excellent return over the next few months, it is acceptable that you do not sell the positions. And before any business opportunity you can always resort to this special line of credit that financial institutions offer you. For it, you will have to pull the calculator and really check if you are going to benefit from the operation, and under what conditions. In any case, the return on the investment will have to be in the double digits to achieve the objectives, after discounting the disbursement of the loan grant.
Fourth key: do not do it with disabilities
Do not apply for one of these financing channels if you are in a situation of handicaps in your positions in equities. Since you probably have to face a double drain on expenses. On the one hand, the derivatives of the granting of credit, and on the other, the open positions in the financial markets. And in the end the outlay will be much stronger than you can assume. With harmful effects on your checking account balance.
Fifth key: look for other alternatives
When looking for loans for your investments, it will be highly recommended that you opt for other less expansive resources, which require less expenses. One of them can come from your own family environment, which can leave you the money under excellent conditions. It is not the only one, but you can request the bank advance of several payrolls, without interest or commissions. Although for this, you will have to domicile the salary in the entity. Surely linking it to an account.
Sixth key: do not miss the bullish scenarios
If your investment is channeled under a clearly upward trend, it will not be a good solution to close the positions to provide yourself with liquidity in the event of any financial need. It is preferable that you take out a loan of these characteristics, since your expenses you will be able to amortize them more successfully. And you will have time to sell your positions, with a much higher price than when buying.
Seventh key: isolate it from other contracts
If you see the need to subscribe any of these financing channels, make sure you have not contracted other credits. Since the support of your level of indebtedness can be exceeded in a very dangerous way, and you may even have problems meeting the repayment terms. With the possibility that you may incur penalties for non-payments, which will make the demand for this product more expensive.
Eighth key: with minimum amounts
And if you finally have no other solution than to formalize it, do it for the lowest amounts that the demand allows. In this way, your return will be easier and faster. Even shortening the repayment periods, without reaching the maximum terms under any circumstances.
Is it really worth borrowing to invest?