Loan Question

[smule]

I took out a unsecured loan for investment purposes couple years back in wich i currently hold stocks, worked well for a while but with the recent market conditions my investment is worth 80% of the loan.

The loan costs me approx 1k a month at a rate of approx 12%

I am in a position to easily service this loan with no duress, but If I have the funds to pay it off should I pay it off

or

Should I try and roll it into my future home loan at home loan rates ?

Is this even possible to do ?

I know its not possible to give financial advice, but in general peoples opinion what would others be doing ?

 

[rugrat]

Personally I would be paying it off. It is an unsecured loan that is costing you more then you are making out of it. The interest rate you are paying on it isn't exactly low. You didn't mention what period you took this loan over, or how long into it. But IMHO unsecured personal debt is best avoided if possible, and minimised if not.

So that is the opinion of a stranger over the internet - take it or leave it

 

[Propertunity]

I took out a unsecured loan for investment purposes couple years back in wich i currently hold stocks, worked well for a while but with the recent market conditions my investment is worth 80% of the loan.

Yes, but this is at present-market-value. Do the stocks you hold have potential for CG? or good dividends? What happens if your investment comes back to 100% of the loan or more?

I am in a position to easily service this loan with no duress, but If I have the funds to pay it off should I pay it off

Maybe you should be asking "Should I sell the underlying investment?" and then payout the 20% loan balance? It all depends....

Should I try and roll it into my future home loan at home loan rates ?

You could if you want and you have the equity.

Is this even possible to do ?

Yes, ppl roll all sorts of loans into their home loan for lower IRs - cars included BUT in the long term it costs 2.5 x the price of what you rolled in there becuase you are paying it off over 25-30 years

 

[Casserole Dish]

Would this loan be deductible? If it's making a loss does that help at tax time? Are these silly questions because a loss is a loss?

But if it is short term wouldn't it be worth sitting on it claiming a loss and then in a few years when the market picks up you'll be sweet again?

Or have I got the wrong end of the stick here?

 

[Propertunity]

But if it is short term wouldn't it be worth sitting on it claiming a loss and then in a few years when the market picks up you'll be sweet again?Or have I got the wrong end of the stick here?

No CD, this was my tinking as well. Short term tax ded while waiting for longer term market recovery. BUT weighing this against the "loss is a loss" before makking a decision.