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Margin Loans Naive Question - Margin Lending

Discussion in 'Finance & Banking' started by Giddo, 16th Jul, 2006.

  1. Giddo

    Giddo Active Member

    9th Jun, 2006
    SE Qld

    I own stock outright, but have never leveraged stocks - only Real Estate.

    I am thinking of 50% margin lend on $50k worth of Navra or similar.

    How do I go about this?

    Do I need a full doc thing happening; or much documentation at all, and how long does it take?
    What do i do to get going?

    Thank you from a shy virgin share leverager.:)
  2. Rick

    Rick Well-Known Member

    16th Aug, 2005
    G'Day Giddo

    Most questions are probably asked because we are naive about something but I think it's a bit too strong a word to use when asking a straight forward question. :)

    For my margin loan I just did some research into which lenders covered the funds I wanted to margin loan against and then rang them for an information pack. You may be able to do this online including a download of the application.

    If you wanted to margin loan against a new 50K fund investment you would just fill in the application send a cheque to cover the initial 50K and let the process happen. Shouldn't take more then a couple of weeks. You don't need much documentation because your initial investment is the security for the loan.

    Your instructions for exactly what you want to do should be covered in the application forms. You will need an account for the interest payments to be deducted, distributions to be paid into and margin calls :eek: to be deducted from if you choose to do this with cash. I just linked mine to a current bank account.

    As for anything that involves your hard earned read all the information until you understand it fully or ask questions until you understand what you are getting into, don't rush in.

    There's a lot more info on these forums so have a search around.

    My experience so far has been good, however, past performance is no guarantee of future performance.:p

    Good luck!
  3. Simon

    Simon Well-Known Member

    17th Sep, 2005
    As far as the process goes it is a NODOC loan - they lend against the asset and have no interest in income or employment.

    So what you could do is send the share details of what you currently own along with an application and request that they use the current shares as security.

    You may also send the prospectus for Navra as well and request that they attach a cheque for $50K and forward it to Navra for processing.

    It really is a simple process. Each time you wish to buy you just send the completed prospectus via the lender and ask them to cut a cheque. If you need to add funds then it can be done as a simple online banking transfer or send them a cheque as well.

    I use Leveraged equities and find them quite easy to deal with.