Investment Loans
Understanding the Risks and Managing Them Wisely
Using borrowed funds to invest—commonly referred to as gearing or leveraging—can be a powerful strategy to accelerate wealth creation. However, it also comes with inherent risks that need careful consideration. A drop in property value can leave you with a loan that exceeds the asset's worth, while unexpected interest rate hikes or rental vacancies can strain your cash flow. Overextending your borrowing capacity without a financial buffer can expose you to unnecessary stress, and securing investment loans against your family home adds an emotional and financial layer of risk that should be approached with caution.
That’s where expert guidance becomes crucial. At Gold Finance, we help you strike the right balance between opportunity and caution. Our team compares multiple loan products to ensure you’re not settling for less, and works with you to avoid over-leverage by building in buffers for rate changes and emergencies.
Market risk If property values drop, you could lose capital—and still owe the loan and interest. 3
Cash flow pressure: If rental income stops or interest rates rise, can you still meet repayments?
Overborrowing: Borrowing the maximum amount may increase risk. It’s better to borrow within your means and maintain a buffer.
Securing with your home? Avoid using your home as loan security. If the investment underperforms, your residence could be at risk.
