Member Feature

A Different Way to Borrow Money

By Susan McGlory Michel

Many people do not realize that they can use their investment securities as collateral to borrow money at very competitive rates.  If you are looking to start or expand a business, purchase a new car or boat, pay for a child’s education or even pay for unexpected healthcare expenses and you own investment securities, such as stocks, bonds, mutual funds or ETFs, you may want to consider setting up a line of credit or taking a loan against the value of some of your investment securities, especially if these are securities that you desire to hold as long term investments.  Security based lines of credit are not margin loans and cannot be used to purchase additional investment securities, but they can be used for most other types of expenses.  These loans typically allow you, the borrower, to borrow up to 70% of the market value of the pledged stocks, bonds and/or mutual funds.  Click here to read more.