Loans to finance PM purchases

As the title suggests who has ever taken out a cash loan to finance PM purchases? I figure it can only work if you know you will be able to repay the loan in 6 or so months and garanteed to make a sizable amount of money on the PM purchase.
Interesting, but also alot of risk involved and i doubt many financial institutions woudl give someone an unsecured personal loan of 50k to buy a commodity that has no 'garantee' of being worth that at the end of the loan period.

 

How can you guarantee anything will be worth anything if you have no control over the value of the medium used as a measuring stick?

 

dont borrow money to invest .....end of

 

If I could I'd borrow enough to buy 1kg of Gold. But I can't so I won't.

 

unsecured personal loan is just that..unsecured. They won't usually care what you use it for as long as it is legal so the only thing you have to 'gaurantee' is that your income can cover the repayments comfortably.

Do the maths and take into account loan application fees, loan exit fees, interest, capital gains tax and buy/sell spread and you'll find that the price might have to go up a lot more than you think to make a decent profit.

 

I dont think its a bad idea straignt after a crash in the POS.... but at $46oz you would be crazy to do this.

 

I havnt borrowed to buy PM yet but am starting to coinsider the option. the sums on intrest over time work in the last 12 months - hindsight ? whats that ?

 

Depends if you intend paying back the loan with the PMs at a future date? If yes the no don't do it. If you intend to pay back the loans with your income then yes do it!

 

I use a line of credit to buy in bulk, then I pay it off as fast as I can.
This saves me the premium and the postage of making small orders.

 

yeha thats the direction i was eluding to, with my CC i get 55 day intrest free by purchasing at the right time of the billing cycle

edit to add:
that gives a headstart n the remainder repaid asap at 10.9%

 

You could also have a whinge to your bank about your cc interest % and see if they will reduce it. If you threaten to cancel the card they'll try to keep you.

 

I have a bankwest lite MasterCard with a 10.75% rate, but balance transfers are 5.99%

It's useful for smaller loans, where you know you can pay it off before the rate reverts.

Ps: some of the margin lenders will lend on listed securities like the GOLD ETF. That's pretty risky though, for two reasons:

1. The lender can arbitrarily decide to lower the lending ratio and put you in margin call (usually during a market downturn which is the worst time to sell)

2. GOLD is "paper gold"

Cheers,
Mistered

 

I don't have a CC but apparently if you change banks with your card you can get 6 mths interest free. Having said that I would n't borrow money to invest in some thing as volatile as silver has been, just my opinion

 

I got a personal loan for 7K a few months ago to buy up.

Best idea yet.

I went back and loaned a further 10k to get more!

I highly advise it. Use the plastic to trade for money.

The interest on the loan has already made itself back through gains just in a few short months.

Instead of buying up every month (when i get paid) and slowly buying, i figured my average buying price per oz would have been significant.

By getting a personal loan i fixed my average buying price and now sit on over 1000/oz. If things go pear shaped i have plenty i OWN outright to bail. A lot of people here are buying into PM to preserve or store their wealth. I'm 19, i have no such wealth to store, but all to gain.

 

I borrowed 5k on a credit card in december for a 2% transaction fee and -0-% interest rate for 12 months. The money was used to purchase silver, gold or both. I have gotten more of these offers lately and I am contemplating what to do. If I do borrow more, it will be to buy physical gold, phys, etc. Silver is too hot right now for me to invest any borrowed money. But, I will happily borrow at a 2% annual rate to invest in gold.

 

Interesting to hear both sides of this debate. I will have a substantial increase in income for a period this year but instead of waiting fo rthat to come through every pay and invest I gave a glancing thought of 'what if' i borrowe dto buy bulk at X price then repaid the loan in a few months with income to avoid interest. It wasnt really more than a passing thought to be honest but i am actually happy ot see that people have done it and come out ahead. Using borrowing power to gain buying power to grow asset based wealth. That is making your money work for you, if you consider money being the ability to borrow.