3 ways you can turn a loan into a profit
There are an infinite number of reasons to take out a personal loan – each of them as worthy as the last.
Some reasons will at first create an expense you’ll have to pay back, but may actually end up turning debt into income.
Here are a few of the ways you may be able to use a loan to make a profit either in the short or long term.
1. Borrowing to invest
Investments can be a fantastic way to create wealth, but they’re not always easy to get into due to lack of funds.
One way to turn a personal loan into a profit is to very carefully invest that money. The trick is to find a high return on investments – as in, one where the profit you create outweighs any interest payments due on the initial loan.
It could be anything from a vehicle you’re looking to restore, or even a friend’s business you want to help kick off the ground in return for company shares. No matter the investment, it will pay to speak to a specialist before making the commitment.
2. Borrowing to learn
Tertiary education fees are often too high for the average student to cover out of pocket.
When you borrow to learn, you are using those funds to better yourself and your skills – which should ultimately pay off once you find a job that pays for that same expertise.
In the Graduate Careers latest study from 2015, a full 68 per cent of new graduates had found full-time employment within four months of finishing their degrees. Additionally, the unemployment rate of those who held a bachelor degree was 3.4 per cent – compared with 8.7 per cent for those with no post-school qualifications.
3. Borrowing to work
A loan used to be able to work is a clear-cut example of potentially turning a debt into a profit.
It can be as simple as borrowing to purchase a car that will get you to your out-of-the-way job every day and eventually use your income to pay off the car loan and continue to earn.
In larger cases, a loan could be just what you need to get your business idea off the ground. You’ll need funds to pay your staff, your marketing expenses, and for any materials and tools you need to get going.
Whatever your reason to take out a loan, chat to the Beyond Bank team about how you can best make it work for you.