A margin lending loan lets you borrow to invest in shares and managed funds. By holding your investment as security for the loan, you are able to invest at higher volumes than you could otherwise afford.
What are the benefits?
Because you are making a bigger investment, if your shares increase in value, you will realise higher profits. There are also tax incentives associated with using a margin lending loan to fund your investments.
What are the risks?
Conversely, a drop in your share values will potentially see you making larger losses.
If this occurs to the point where the value of your investment falls below the amount you borrowed, you will experience negative equity, and may need to repay more money than you borrowed. Share market investments are also generally risky because of the uncertainty of price movements.
For some of the best margin lending loans, you can use RateCity comparison tools to find some of the lowest rates from some of your favourite margin lenders.