1. Advisorkhoj
  2. Post Your Queries
  3. Mutual Fund
  4. How about taking a personal loan of 5 Lacs 15 percent and invest in mutual funds

How about taking a personal loan of 5 Lacs @15% and invest in mutual funds

If I take a personal loan of 500000/- from any bank on interest rate 15% and I invest 400000/- in mutual fund for 3 or 4 years. Will it be my right decision? Will it return as more than 15% after 3 or 4 years? I will be thankful for your valuable advice?

Apr 4, 2016 by Udham Singh, Mansa  |   Mutual Fund

It is not a good idea at all to take a personal loan @15% and invest in mutual funds. Please note that mutual funds or equity oriented investments carry market risks and returns are not assured. Also, if you are investing in equity mutual funds then the minimum investment horizon should be of 5 years atleast.

However, the most important point to note here is that legally you can not use the personal loan amount for any speculative or market linked investments. Most of the personal loan providers including banks define that end use of the personal loan can be house renovation, holidays, purchase of consumer durables, education, marriage, short term loan for equipment purchase, short term working Capital, any other personal emergency requirements of the customers and their families.

comments powered by Disqus
You haven't found the answer for your queries? Do post your queries to us.

© 2016 Advisorkhoj - A Gamechanger Business Services (I) Pvt. Ltd. Brand - All Rights Reserved