What is Margin Lending?
A margin lending facility allows you to borrow using a portfolio of approved investments (generally shares and managed funds) as security for the loan. Most lenders will lend you between 30% and 70% of the value of approved investments. You are legally responsible for repayment of the borrowings and the servicing of the interest even though the investments may fall in value.
Borrowing to invest, or gearing, allows you to make a larger investment than would be possible using only your own funds. This increases your potential for investment income, capital growth and opportunities to earn franking credits. |