Would taking out a personal loan to invest be a good idea?
It might be, but you haven’t given enough information to be sure. First, you didn’t say what rate the personal loan would be at? Then, you need to identify what your tax implications from earning the interest would be. I would also want to know if there was any prepayment penalty on the personal loan. I have seen banks in the US advertise high savings rates like 8%, but when you read the fine print they only pay that high on the first $500, everything after that is at a significantly reduced rate. However, if in fact the math comes out so that you make more in interest after taxes than you pay on the personal loan and: – the interest rate on the personal loan is fixed – you can pay back the loan at any time with no penalty – the interest is guaranteed and the money is not locked up somehow – so that if the high interest rate you were earning ever went away you could cash out and pay the loan off immediately – you are the type of person who will not neglect this situation, will never fo
