Hi, If I take a new line of credit loan against the equity on my existing IP and use the fund on the new line of credit for a personal purpose (eg car), would it cause any issues on my existing investment loan such as tax deduction? As far as I know, it is OK to have LOC for personal purpose as long as the new LOC account is separated from the existing investment loan. I heard loan contamination and wish to make sure it won't cause any future issues on my existing investment loan when I take a new line of credit loan against the equity on the IP for personal loan purpose. Thanks, Hyong Cho
You've worked it out well - keep it separate and then you're fine. Another note - make sure you do an accelerated repayment on the loan which mimicks a normal car loan of 3-7yrs (depending on your needs) - last thing you want is a LOC with a 30 year loan term and you have a car worth nothing after 10 years but all the debt still.