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Yes. As with other forms of unsecured debt, personal loans are included when calculating your Total Debt Servicing Ratio (TDSR).
It is important to keep track of your TDSR if you are planning to buy a residential property. This is because borrowers are limited to 60% TDSR when calculating your monthly mortgage. Hence, in borrowing for investment purposes, take care that you do not inadvertently affect your mortgage limit.
The risk of using a personal loan for investment is directly tied to the type of investment you use it for. If your investment performs well and gives you returns that are higher than the interest on your loan, your personal loan will pay for itself. You may even end up making a bit of money in the process.
However, if your investment performs poorly, you run the risk of incurring additional debt. This will add to your burdens, as not only will you have to keep up with the monthly installment payments on your personal loan, you will still have to deal with the losses you incurred from investing. Hence, before taking a personal loan for investment purposes, review your investment's risk level. You should always consult a qualified finance professional before making any investments.
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