, you should feel OK about taking on purposeful debt that's below 10% APR, and even better if it's below 5% APR.
At such low rates, Sanborn Lawrence argues that you can breathe easy knowing you can make up for those interest fees in other areas.. "That is, effectively, borrowing money at a lower rate than you're able to make on that money." It may sound fancy, but arbitrage is simple: If you had a $5,000 loan and were paying 4% interest on it for two years, but also had $5,000 invested in the stock market that earned 8% annually, you would be earning more on your investments than you're paying in interest.Like everything money-related, this comes with a little bit of risk. Borrowing and investing is always a gamble since there's no guarantee the stock market will perform the way we think it should.
However, it's a calculated risk based on historical data: "We say 5% to 10% because that is the historic average rate of return of investments," says Sanborn Lawrence.historically yieldedBut while Sanborn Lawrence's advice is rooted in fact, she acknowledges that it's not one-size-fits-all: "It does depend on, of course, how aggressively you invest," she says.
Your personal loan APR will be decided based on your credit score, credit history and income, as well as other factors like the loan's size and term. Some of these factors you can control; some might be out of your hands.
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Your article should be investigated by the regulators as it has misleading info about what arbitrage is. Shame
The New Jersey based Soprano Loan & Finance Co. is offering 3% a week. No credit check necessary
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