What Is Commsec Loan?
What is CommSec Loan?
CommSec Loan is a unique loan product offered by Commonwealth Securities (CommSec), the online trading platform of the Commonwealth Bank of Australia. It is a secured personal loan against your investments with CommSec. This means you can use your existing stocks, managed funds and exchange traded funds (ETFs) as collateral to secure a loan.
How Does CommSec Loan Work?
CommSec Loan allows you to borrow up to 80% of the value of your eligible investments. The loan is secured by your investments, which are held in a separate account at CommSec until the loan is repaid. This means that if you default on your loan, your investments can be used to cover the balance of the loan.
The interest rate on CommSec Loan is currently 6.95% per annum and you can choose a repayment period of 1 to 5 years. The minimum loan amount is $2,000 and the maximum loan amount is $50,000. You can also make additional repayments at any time without penalty.
What Are the Benefits of a CommSec Loan?
There are several advantages of a CommSec Loan. Firstly, it is a convenient and cost-effective way to access the equity in your investments. Secondly, you can use the loan to diversify your investments, as you can use the funds to buy new investments. Lastly, the loan is secured by your existing investments, so you don’t have to put up any additional security.
What Are the Risks of a CommSec Loan?
The main risk associated with a CommSec Loan is that if you default on your loan, your investments can be used to cover the balance of the loan. This means that if your investments decline in value, you may end up owing more than the loan amount. Another risk is that if your investments increase in value, you may not be able to access the full value of your investments as they are held as collateral for the loan.
Conclusion
A CommSec Loan provides a convenient and cost-effective way to access the equity in your investments. However, it is important to understand the risks associated with the loan before taking it out. As with any loan, it is important to ensure that you can afford the repayments before taking out a CommSec Loan.
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