They can get interest rates that are lower than the tax they would pay. Often, they hardly pay any interest at all.
Comment on Borrowing money against their stuff to get more stuff to borrow money...
hexabs@lemmy.world 1 week ago
Might be a silly question –
Why not get taxed by selling it once and for all instead of paying interest on the loan against it for years.
In the long run won’t interest surpass the one time tax?
Also assuming they invest the surplus after the sale, it should be the cheaper option.
JcbAzPx@lemmy.world 1 week ago
hexabs@lemmy.world 1 week ago
Why do banks do this? Sounds like a favor.
smeenz@lemmy.nz 1 week ago
Because a small rate on a large loan is still a lot of income to the bank
ThirdConsul@lemmy.zip 1 week ago
And of course because banks can create more money than they have.
JcbAzPx@lemmy.world 1 week ago
Well, many of the people that do this have large stakes in banks.
Capitao_Duarte@lemmy.eco.br 1 week ago
Can’t say much about US, but in my country if you get 100k assured by an investment of 100k, for exemple, you pay 1.2% in the loan, but the investment keeps going up by 1.1%. So you pay 0.1% for the 100k. A LOT less that you’d pay if getting your own money back
hexabs@lemmy.world 1 week ago
Sounds like a bank interest problem, no?
If all I need to beat is 1.1% annual growth rateon my investments, I would take loans against most of my assets and turn a profit.
Why the low interest rates in the banks in your country?
Capitao_Duarte@lemmy.eco.br 1 week ago
It’s not a low interest for everyone. But here its like this: of you pay, fine, at the end your money (invested) is yours to do what you want. If you don’t pay, the bank will keep your investment as payment. The investment is the way the bank assures you are going to pay. If you can’t put anything in the deal (car, house, investment) you’ll pay full interest, which could be anything. I see clients getting 6,5% interest all the time