Get The Most Out Of Your Investments By Using Interest Only Loans

“A corporation’s primary goal is to make money. Government’s primary role is to take a big chunk of that money and give it to others.” -Larry Ellison

Due to the rapid rise in house prices and the booming real estate market interest only loans are extremely popular and quite useful. This type of loan differs from a traditional loan. This is because each payment made to a traditional loan pays down both principal and interest.

However, in an interest only loan, the payment is just for the interest. For a loan of $20,000 dollars, you would have to pay, at prime rate, only $71 dollars a month.

Interest only loans are a great way to finance investments. Place your money in a high yield money market account, mutual fund, or even in the stock market you will earn enough profit to pay back the interest, the loan, and still have plenty left over for your own pocket.

All investments carry risk, and if you are interested in investing make sure you contact a financial advisor to help you on your way to create a financial plan which will help establish your financial freedom.

There are basically three ways which are most common and more lucrative ways in which to use your interest only loan. Remember none of these guarantee profit and all your financial decisions should be based on solid research.

Endowment Policies. This is probably the most common type of investment to be used in combination with interest only loans. Your money is invested directly in the stock market. Endowment policies usually pay rewards annually and then at the end of the term length you receive a single check for the rest of the money. In addition, Endowment policies have a built in life insurance policy which is great for your family and their economic future ISAs & PEPs.

Individual savings accounts have now replaced what used to be called personal equity plans. ISAs are investments with that offer the investors tax benefits. Money placed in a ISA is not subject to income or capital gains tax. Most ISAs are composed of a variety of options including cash, stocks, shares, and insurance. As of right now, there are limits of how much money you can place into an ISA however shortly those restrictions will be gone.

Pensions. Pensions are a great place to get money to pay down the money owed on your mortgage at the end of the term. Term length is usually around 40 years. Using your retirement money to pay off your mortgage may not be a good idea especially if you have no other means of income or investments after retirement.