Silver and gold have for a long time been considered safe investments, especially during times of economic instability.
If the stock market is in turmoil or economy are unstable investors are advised to invest their money in commodities like gold or silver.
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You may think that purchasing silver or gold using the help of a personal loan is a viable investment option.
It could be a viable alternative if you are able to get an investment loan that has an interest rate that is lower than the expected return on your investment to be. However, there are other factors to think about.
The purchase of Silver and Gold with the help of a personal loan
If you have low interest rates and the cost of silver and gold is increasing rapidly, the price of silver and gold may increase at a higher rate that the amount you’ll have to pay for the interest you pay on loans, that’s why some make use of the option of a personal loan to buy gold and silver.
It’s not a feasible method of investing for everyone also. Below are a few personal loan lenders to consider for purchasing silver or gold along with some pros and cons of this strategy.
Why Getting a Gold or Silver Loan Isn’t a Good Idea.
There is a great deal of risk involved in this investment as not all is able to qualify for an personal loan with a low enough interest rate to guarantee that they are able to make a profit when you factor in the rise in the price of silver or gold. If the value of silver or gold decreases or rises, you may not make a profit. Therefore, it’s not a good option for those who can’t afford to lose a part of their savings.
Why a Gold or Silver Loan Makes Sense
A personal loan to buy gold or silver does not have any significant advantages, in our view.
What Are the Silver Returns?
Was silver more profitable during these times? The price of silver has increased by over 19% in the past year. However silver has dropped in value by 4.7 percent over the past 10 years. As you can see, the price changes in the past are substantial.
If you make an personal loan to acquire silver (or gold) is an extremely high chance that your investment could be lost over time or may not increase by enough value to cover the interest you’ll have to pay.
What Are the Gold Returns?
Do you think you could earn money by using borrowed funds to invest in gold, at today’s rates of interest?
The gold return varies greatly based on the time. For instance, gold has seen its price rise by over 29% over the past year.
It could tempt you to go out and purchase gold, but bear in mind that the price of gold has only increased by 16.76 percent in the past 10 years, or the equivalent of a 1.56 percent annual return, less than what you would have had to pay in order to borrow money over the same time.
Conclusion
The purchase of silver or gold with the help of a personal loan is a risky decision, so you must consider whether it’s an investment that is worth it in the current situation before making a purchase. Even if you’re a veteran investor who believes you can predict the moment when silver and gold prices will rise and fall, you could be in the wrong and even lose funds.
