Do You Qualify for a Stock Loan?
The top ten percent of Americans invest an average of $969,000 in stocks, while the next 40 percent owned around $132,000.
Did you know this stock could be a valuable asset to secure a loan? Borrowers can now use stock as collateral 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 collateral.
Typically, the maximum you can borrow is between 50-80 percent of your stock market value, but this amount varies across financial institutions.
The financial institution keeps your stock during your loan period. You can still receive dividend payments.
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 a non-marginable stock that trades on NASDAQ, NYSE, NASDAQ, or the OTC Markets, you may qualify for loan, using your stock.
Your stock is the only collateral 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 transfer 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 12, 24, or 36 month terms.
You can borrow between 45 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 Services
Are you in need of a loan and thinking this sounds like a good option?
To learn more about our StockLoan 101 program, contact a loan specialist at 1.866.446.1009 today.