Like, yeah, there’s some breakage, but your return on investment is going to be close to interest rate.
Buy a stock and you might beat 10%, you might not.
Buy debt, and you get your interest or sell it to a third party for a smaller amount, likely still more than the amount loaned, just piled high with interest.
It’s never truly guaranteed, even if there’s collateral.
Guaranteed as in rate of return for the lender…
Like, yeah, there’s some breakage, but your return on investment is going to be close to interest rate.
Buy a stock and you might beat 10%, you might not.
Buy debt, and you get your interest or sell it to a third party for a smaller amount, likely still more than the amount loaned, just piled high with interest.
It’s not guaranteed because a lot of people default of their loans.
And collateral can lose value after the loan is issued.