Is that legal? Please Answer...

raamu1234 · #1 7th April 2007, 12:19 AM

Is that legal to get personal loans from bank and invest in shares? Example, to get r.s 1 lak personal loan from ICICI or HDFC bank and invest the money in share market?

Since, its personal loan money, we can use it as we want rite? Please, please clarify this.

aca_trader · #2 7th April 2007, 12:50 AM

Quote:

Originally Posted by raamu1234

Is that legal to get personal loans from bank and invest in shares? Example, to get r.s 1 lak personal loan from ICICI or HDFC bank and invest the money in share market?

Since, its personal loan money, we can use it as we want rite? Please, please clarify this.

Yes! Perfectly Legal. Even you can do this with Loan against property.

Best Regards,
--Ashish

Jai.Shewaramani · #3 7th April 2007, 02:42 PM

Quote:

Originally Posted by raamu1234

Is that legal to get personal loans from bank and invest in shares? Example, to get r.s 1 lak personal loan from ICICI or HDFC bank and invest the money in share market?

Since, its personal loan money, we can use it as we want rite? Please, please clarify this.

Thou it's legal, I would advice you not to invest money taken by loan or money which you cannot afford to lose, which might affect your day to day life.

Invest money only which you can afford to lose, or else stay out.

RAMDAS · #4 7th April 2007, 05:26 PM

Quote:

Originally Posted by Jai.Shewaramani

Thou it's legal, I would advice you not to invest money taken by loan or money which you cannot afford to lose, which might affect your day to day life.

Invest money only which you can afford to lose, or else stay out.

Yes correctly said, Unless you have good track recored and know how to trade then only go for it.. else,, stay away from such path. . Loan money increases stress level and that result in to improper decissions. if you trade with cool mind then only you will able to understand market , else fear and greed takes control and causes improper decissions.

birdinfo · #5 7th April 2007, 10:28 PM

Quote:

Originally Posted by RAMDAS

Yes correctly said, Unless you have good track recored and know how to trade then only go for it.. else,, stay away from such path. . Loan money increases stress level and that result in to improper decissions. if you trade with cool mind then only you will able to understand market , else fear and greed takes control and causes improper decissions.

If you have capacity to pay loan from your income you can take this loan at the time whenever any bear phase ends.Buy only NIFTYBEES and dividend should be used to pay part loan.The time horizon for this kind of investment should be up to end of any bull phase.

musicjunkie · #6 8th April 2007, 02:57 PM

Since we are on a topic which pokes at "legalities" i would want to ask if its alright if other people invest with you. For eg: my friend wants to invest a certain amount with me for a years time frame, for this to work do i need to have a license or some fund?
basically is it legal if i take money from my friends and give them a return over a years time frame?

aca_trader · #7 9th April 2007, 01:37 AM

Quote:

Originally Posted by musicjunkie

Since we are on a topic which pokes at "legalities" i would want to ask if its alright if other people invest with you. For eg: my friend wants to invest a certain amount with me for a years time frame, for this to work do i need to have a license or some fund?
basically is it legal if i take money from my friends and give them a return over a years time frame?

Well! only a registered PMS provider can do this. Two of the basic criteria of registration, among others, is that your networth should be atleast Rs. 50 lacs and the chief fuctionary should be a finance professional like a CA, etc.

Best Regards,
--Ashish

vazu · #8 9th April 2007, 02:12 AM

Dear friend,

You are right. You can take personal loan or any kind of loans from any institution and invest it in stocks. You have to maintain records of loan and investment history from your broker as well as your banker for withdrawal of money in stocks. Thats it.

Some Government jobs do have rules curtailing employees in overtrading in stock markets because during office hours you will not concentrate.

Otherwise it is perfectly legal to be an investor.

But a little bit of advise to you. Never borrow money to play in stocks.

Vazu

aca_trader · #9 9th April 2007, 09:57 AM

Quote:

Originally Posted by vazu

But a little bit of advise to you. Never borrow money to play in stocks.

Vazu

Even leverage afforded by derivaties and margins is borrowing money. Till the time ROI is greater that interest rate, it makes senses to borrow and invest. BTW, why nobody is giving this advise to institutions and entreprenuers?

Best Regards,
--Ashish

musicjunkie · #10 9th April 2007, 06:45 PM

Thank you ACA trader, just a little more clarification, what do you mean by chief functionary ? i wll hire a CA to get registered but what does chief funtionary mean in this context? its just that i dont want anyone to butt into my descisions.
Thankx
MJ

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