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A Margin Loan allows you to borrow money to invest in managed funds and shares. As with borrowing for the purchase of any asset, you need to contribute towards the cost.
The amount of credit loaned is based upon the amount of assets held by the borrower. These assets are pledged as collateral on the loan. This program is often used by individuals who want to invest more than they are currently investing, and are willing to take on the risk of this type of loan.
With a margin loan you can use either your existing investments or cash as your contribution.
The amount you can borrow depends on the value of your investments and the percentage borrowing limit of the investments you choose.
Individuals, companies and trusts can take out margin loans.