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Do You Qualify for a Stock Loan?

January 04, 20243 min read

The top ten percent of Americans invest an average of $969,000 in stocks, while the next 40 percent own around $132,000.

Did you know this stock could be a valuable asset used to secure a loan? Borrowers can pledge their shares to get a quick loan instead of using other personal property such as houses, cars, or other properties.

Stock loans can be issued quickly compared to other loans. The amount you can borrow varies across financial institutions. Once you repay your loan, your stocks will be transferred back to you.

There are financial institutions that solely provide stock loans.

Learn more about this loan below and see if you qualify.

What Is A Stock Loan?

A stock loan is similar to other loans. Your stock is your security for the loan.

Typically, the maximum you can borrow is between 40-60 percent of the stock's market value, but this amount varies across financial institutions. The financial institution keeps your stock during your loan period.

If you default on your loan, the financial institution will take possession of your stock just like they would with any other personal property you use to secure a loan.

As with any other loan, you will pay interest on it. These payments are often quarterly.

Do You Qualify For A Loan?

If you own shares that trade on NASDAQ, NYSE, NASDAQ, or the OTC Markets, you may qualify for loan, using your stock.

Your stock is the only security needed for this loan. Unlike other loans, your credit will not be pulled for qualification.

After The Loan

At the end of your loan period, you can decide to:

  • Extend the loan - Sometimes you can extend the loan.

  • Reclaim your stock - To do this, you must repay the loan and interest.

  • Cash in profits - If the value of the stock has increased above the original loan amount, with interest, the customer can choose to get a cash payment of this profit less the loan amount.

  • Count your losses - If the stock value is below the amount of the loan and interest, you can walk away. The stock will be turned over to the lender.

If you default on this loan, you will lose your stock, but will not lose any additional person property. Unlike other loans, this will not damage your credit.

Terms And Conditions

You can find stock loans ranging from $50,000 to $5 million, depending on the financial institution. You can choose from 24, 36, or 60 month terms. and you can usually borrow between 40 to 60 percent of your stock value.

Advantages Of A Stock Loan

There are several advantages to a stock loan, including:

  • Quick turnaround - You can often receive your loan within 48 hours.

  • No credit required - You will not hurt your credit on this loan and can qualify for a loan easily.

  • Flexibility - You can walk away at anytime if your stock loses value.

  • Invest more - You can use this loan to alternate investments.

  • Retain the stock benefits - You can still receive your dividend payments.

Check Out Our Stock Loan Program

Are you in need of a loan and thinking this sounds like a good option?

To learn more about our stock loan program, contact a loan specialist at today.

David

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The information contained herein is presented solely for the purposes of discussion and under no circumstances should this be considered an offer to buy or a solicitation of an offer to sell any security. Stock Loan Solutions is not a registered securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. Stock Loan Solutions, its managers or affiliates have not been registered and do not plan to be registered under the Investment Advisers Act of 1940 or any similar state or foreign securities laws. Stock Loan Solutions is not registered under the Investment Company Act of 1940 or under any similar state or international securities laws. Stock Loan Solutions does not offer any form of investment (buy or sell) advice, tax counseling, estate planning, or any other securities or financial advice whatsoever. No statements on this website or any verbal or written statement by any representative shall be construed as such advice. We are neither licensed nor qualified to provide investment advice.

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