A Margin Loan is a facility that allows investors to borrow money which, in addition to their own money, is used to invest in various approved listed investments. Borrowing to acquire an asset is called gearing or leverage. Through our strategic partners Medallion Financial is able to facilitate margin loan facilities for clients.
Margin loans provide investors with the opportunity to building a larger portfolio and if implemented successfully, can help investors to potentially increase their wealth more quickly.
Having a Margin Loan
Margin lending is not for everyone. It must be noted that any leveraged or borrowing strategy should always be approached with caution. While gearing can amplify returns to the upside, they also have the potential to multiple losses to the downside.
Investors must hold sufficient cash or existing shares holdings that can be used as security for the loan. Only certain shares can be used as security and the amount that can be borrowed will vary depending on each shareholding in the portfolio and the available cash.