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> I think you're ascribing ill will where there isn't any. Banks charge high interest to business and/or personal loans not because they hate poor people or wha
by GDC7 5y ago
> I think you're ascribing ill will where there isn't any. Banks charge high interest to business and/or personal loans not because they hate poor people or whatever, but because they're risky.
I don't mean to accuse bankers, if anything I meant to stress that this method has something which doesn't add up .
Think about it , even if your net worth is 1M you still have to go through a conversation with the bank before they loan you money. They want to know your intentions, what are you going to do with it and so forth. They size you up, and the 1M net worth doesn't even count as a tool to reduce the burden of questions.
This method instead : you post some securities and you get a loan with no questions asked. It seems too good to be true or intentional from the financial institution side as it completely sidesteps the due diligence process.
- gruez 5y ago>This method instead : you post some securities and you get a loan with no questions asked. It seems too good to be true or intentional from the financial institution side as it completely sidesteps the due diligence process. It's not any different than going to a pawn shop and getting a loan, no questions asked. They don't ask any questions (aside from any mandatory AML/KYC ones) because they don't need to. The combination of easy to sell/liquid stock and the margin requirement makes it very unlikely that they'll lose their money. If you have $100k worth of stocks, SEC/FINRA regulations means that you can borrow up to $50k, and your portfolio can drop another $25k before they start liquidating your holdings. At that point you still have $75k worth of collateral for $50k worth of loans, so the chances of them losing money is slim.