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Would being rejected for a margin loan look bad on your credit record?

Discussion in 'Accounting & Tax' started by jaybean, 13th Jan, 2016.

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  1. jaybean

    jaybean Well-Known Member

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    Last time I got one they asked me how much I wanted. I wanted as much as I could get, but at the same time I didn't want to get rejected. So I just picked a number out of thin air (200k) and it got approved.

    But this was before I hit my borrowing limit on residential properties so the sky was almost the limit...I think anyway.

    In the RE finance world, you can get rough estimates from brokers. How do I go about getting the same in the equities world?

    The last thing I'd want to do is pick a number out of the sky like I did last time, get rejected, and have it leave a black mark on my record.

    Basically, I want to get as much as I can get. But the onus seems to be on me to know what that number is and I don't even know where to start. Do banks allow you to just say "here's my financial situation, give me as much as you can"? I don't recall seeing such an option when I got my last ML. I only remember being asked to nominate an amount.
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    I don't know much about qualifing for margin loans, but remember whether you are reject or accepted doesn't appear on your credit report, just that you applied. If a future lender queries it you would just say you didn't take that loan out in the end. no big deal, but it could effect for the lenders that credit score.
     
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  3. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    It'll only note the credit hit, lender and date - not whether the file was successful, declined, accepted, withdrawn etc.

    I'm more surprised you got declined from a margin loan limit - they hand those out like candy at times.
     
  4. wategos

    wategos Well-Known Member

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    Yes I am surprised also, margin loans I have taken out do not check any income or anything, it is all based on the equity you have with existing stock. Income does not matter, the interest is debited daily or monthly. They can exterminate a margin loan immediately if it comes close to generating a loss for the lender. For this reason they much safer from a lenders perspective so in reality they should command a much lower interest rate, which they do sometimes but not with most Australia lenders, I smell a rip off.
     
  5. D.T.

    D.T. Adelaide Property Manager Business Member

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    In what way are they safer? Thinking in terms of daily volatility here.
     
  6. jaybean

    jaybean Well-Known Member

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    I think he means in terms of knowing it's true position. They know very quickly if a margin call is required. In real estate it's sometimes hard to ascertain the real health of the market at any given time.