ADVANCED STRATEGIES • STEP 4 OF 4
Check It: Final Quiz
Knowledge without action is futile. Action without knowledge is dangerous.
Ancient Proverb
Test your understanding of how borrowing against an asset and selling it work. Pass with 80% to complete this module.
Your Learning Journey
Your Learning Journey
This Quiz Takes: ~10 minutes
9 questions testing your understanding of collateral loans, tax treatment, and risk management.
Passing Score
Get 8/9 correct (80% or more) to pass. Don't worry - you can retake it as many times as needed!
Ready for the Boss Quiz?
12 questions. 6 minutes. Game-show style. Can you beat the clock?
Rules:
- •Answer all 12 questions in 6 minutes
- •No going back to previous questions
- •Score 80%+ to pass and get your certificate
- •100% = Perfect Score badge!
What Taking a Collateral Loan Involves
The steps, and the terms that set the cost and the liquidation risk.
Collateral
Asset types lenders commonly accept:
- • Bitcoin and other crypto (the 50% CGT discount applies to assets held over 12 months)
- • Physical gold/silver in allocated storage
- • ASX and US listed shares and ETFs
- • Property equity
Lender Terms
Terms differ by lender: maximum LTV, interest rate, liquidation threshold, the notice period before a liquidation, and whether unpaid interest is added to the loan.
The Numbers
The calculator in Step 3 (Try It) computes, from your inputs:
- • The LTV of the loan amount you enter
- • Interest over the term, and the CGT on the units you would otherwise sell
- • The net position of each path, and the difference between them
Monitoring
What moves during the loan:
- • LTV: changes with the collateral price every day
- • Margin call: lenders typically issue one as the LTV nears the threshold
- • Meeting a call: takes added collateral or a part repayment
- • Interest: accrues every month regardless of the price
Who Covers What
The questions this page does not answer for your situation:
- • Registered tax agent: whether the interest is deductible for your use of the money
- • Licensed financial adviser: personal advice that takes your situation into account
- • Lender's loan agreement: the liquidation terms and LTV limits that apply
Reminder: This content is factual information only and does not take your situation into account.
Borrow Strategy - Check It: Complete
- Borrowing against an asset adds interest and liquidation risk, and leverage amplifies losses as well as gains.
- The price fall that reaches a lender's threshold is 1 − (starting LTV ÷ threshold); volatility sets how often a fall that size happens.
- A lender liquidation is a CGT event; loan proceeds are not income.
Homework
Which part of the mechanics (CGT timing, interest deductibility, LTV) would you check against your own numbers first?
For advice on your own situation, a licensed financial adviser and a registered tax agent can apply these rules to your assets, risk tolerance and tax position.