Loans for Investing? Here's How to Grow Wealth Safely

Are you considering taking the leap into the investment world but wondering if you can secure a loan to kickstart your journey? With property prices and investment opportunities at a premium, many Australians are exploring finance options to help them invest in property, shares, or other ventures. Understanding how to obtain a loan for investing could be the key to unlocking your financial future.

Understanding Investment Loans

Investment loans are a type of financing designed specifically to help individuals invest in assets like property or shares. These loans differ from standard home loans as they are tailored to suit investment purposes, offering flexibility in terms of repayment and interest rates. When considering an investment loan, it's crucial to understand the types of investments you're interested in, the associated risks, and your financial capacity to manage the loan.

Current Market Rates and Requirements

In 2026, the Australian investment loan market is quite dynamic, with interest rates generally ranging from 6.49% to 12%, depending on various factors such as the type of investment, your credit score, and the lender's policies. The rates are influenced by the Reserve Bank of Australia’s monetary policy and the economic climate.

Eligibility criteria for investment loans usually include:

• A good credit score, typically above 650.
• Proof of stable income.
• A reasonable debt-to-income ratio.
• In some cases, a deposit of at least 10% of the property's value for real estate investments.

Steps to Secure an Investment Loan

Securing an investment loan involves several key steps:

1. Assess Your Financial Situation: Review your income, expenses, and existing debts to ensure you can afford the loan repayments.
2. Research Lenders: Look into different lenders, including those on Esteb and Co’s panel of 83+ lenders, to find the best rates and terms.
3. Prepare Necessary Documentation: Gather documents such as proof of income, tax returns, and identification.
4. Apply for Pre-Approval: Seek pre-approval from your chosen lender to understand how much you can borrow.
5. Select Your Investment: Choose the asset you wish to invest in, whether it be property, shares, or another investment type.
6. Finalise the Loan: Once your investment is confirmed, complete the loan application with the lender.

Expert Tips and Considerations

Here are some expert tips to consider when looking for an investment loan:

• Understand the Risks: Investments can be volatile. Make sure you have a buffer for unexpected changes in the market.
• Consult a Financial Advisor: Before committing to a loan, seek advice from a financial advisor to ensure it aligns with your financial goals.
• Consider Interest-Only Loans: These can reduce monthly repayments in the short term, freeing up cash flow for more investments.
• Review Loan Features: Look for features like redraw facilities or offset accounts that can offer flexibility.

Frequently Asked Questions

1. Can I use an investment loan to purchase shares?
Yes, some lenders offer investment loans specifically for purchasing shares, though terms and conditions may vary.

2. What is the minimum deposit required for an investment property loan?
Typically, a minimum deposit of 10% is required, but some lenders may ask for more depending on your financial situation and the property's value.

3. Are interest rates for investment loans higher than home loans?
Yes, investment loans usually have higher interest rates due to the perceived higher risk associated with investments.

4. Can I get an investment loan with bad credit?
It’s more challenging, but not impossible. Some lenders specialise in providing loans to individuals with less-than-perfect credit, though rates and terms may not be as favourable.

5. How does an offset account benefit my investment loan?
An offset account can reduce the interest payable on your loan by offsetting the balance against the loan principal, potentially saving you money over time.

6. Is refinancing an option for investment loans?
Yes, refinancing can be a viable option to secure a better rate or terms, especially if your property has appreciated in value or your financial situation has improved.

7. How do I choose the right lender?
Consider factors such as interest rates, loan features, and customer service. Esteb and Co can help you navigate through options with their extensive panel of 83+ lenders.