Re: $5 million needed in my SMSF for a NAB SMSF loan?
Posted: Wed Apr 24, 2019 6:43 pm
Hello Shawn. Welcome to the forums.
Yes, it’s still possible to borrow within SMSF. There’s a range of non-bank lenders who still offer SMSF loans and that’s who we’re working with. Even though NAB technically still offer SMSF loans, in reality, they don’t. Like you mentioned, with NAB you’d need to have $5 million in your SMSF, so yeah less than 1% of the population will qualify for it.
There are several reasons as to why most banks pulled out of self-managed super fund (SMSF) lending:
Cheers,
Yes, it’s still possible to borrow within SMSF. There’s a range of non-bank lenders who still offer SMSF loans and that’s who we’re working with. Even though NAB technically still offer SMSF loans, in reality, they don’t. Like you mentioned, with NAB you’d need to have $5 million in your SMSF, so yeah less than 1% of the population will qualify for it.
There are several reasons as to why most banks pulled out of self-managed super fund (SMSF) lending:
- During the Royal Commission, there were a few case studies about SMSF, where customers were given poor financial advice. In particular, there
- were a lot of people who weren’t that wealthy who were buying properties in their SMSF. If you have millions in your super then sure, it makes sense but if you have only $200k in super, then the expenses of managing an SMSF probably means it may not be a good deal for you.
- Some customers are also not familiar with SMSF rules and so they accidentally break them. For example, you can’t live in the investment property that’s in your SMSF.
- So, banks are scared for their reputation. Pretty much all the major lenders have stopped doing SMSF lending.
- The complexity of meeting the regulatory requirements and the return on investment of SMSF is not worth the risk for some lenders.
Cheers,