2007-12-26 16:32:12 · 7 answers · asked by Ivana C 1 in Business & Finance ➔ Personal Finance
Yes, but it's a horrible idea. If you borrow money at 15%, your stock has to increase by 15% just to break even. What if it goes down by 15% in a year. Then, you have to come up with 30%.
2007-12-26 18:11:47 · answer #1 · answered by Kyle B 4 · 0⤊ 0⤋
It's legal as long as you have not deceived the bank as to what you plan on taking the loan out for [don't apply for a car loan only to purchase stock]. As a side note, buying stocks, or any other investment tool for that matter, with a loan is quite irresponsible. Even "sure bets" fail rapidly. While your hot tip might not be a sure thing, bank debt is.
2007-12-26 17:14:55 · answer #2 · answered by Chris 6 · 0⤊ 0⤋
It depends on what you said you were borrowing the money for. If it's a personal loan, do as you wish with it. If you borrowed it to buy a car, and then buy stock, the bank may charge you with fraud...as you do not have the car to serve as collateral. Each situation will be different.
2007-12-26 16:41:05 · answer #3 · answered by Anonymous · 0⤊ 0⤋
It is legal if it is not otherwise stated in the loan contract. However, it is not advised because if you lose the money you will be in a big whole with accruing interest creeping down your back.
good luck
2007-12-26 17:01:19 · answer #4 · answered by Clark Kent 1 · 0⤊ 0⤋
Yes, but it is real risky and probable the most expensive way to do it. With the present credit crunch I doubt a bank would do it.
2007-12-26 16:41:35 · answer #5 · answered by Anonymous · 0⤊ 0⤋
It is legal....just not the smartest think to do.
2007-12-27 01:05:07 · answer #6 · answered by Wayne Z 7 · 0⤊ 0⤋
What could possibly go wrong!
2007-12-26 17:06:22 · answer #7 · answered by Anonymous · 0⤊ 0⤋