Loan advice

If you own stocks you may or may not know that you are able to use your stocks as collateral to get a loan. This is a great way for anyone to get a loan without going through the bank and having to deal with the lengthy process of bank applications.  If you chose to borrow money this way, it may be a little lengthy as well, but you will be able to receive a larger sum of money.  If you are however, experiencing an emergency and find that you need the money quickly and are just needing a small amount of money maybe up to $1000, you may want to consider using a pay day loan in it’s place. This could be a great option for someone who needs money in between their monthly income. However, back to our original topic, if you have investments in stocks, you have many more options for loans and may be able to use them for larger purchases.

If you do find yourself in need of a larger sum of money and happen to be invested in stocks, you have the option of using your stock as collateral towards a loan. Before going ahead and choosing this method of loan, it’s important to understand the specifics and the details of what the process entail. Usually people who borrow against their stocks are looking for a larger amount of money, $5000 and up.  You can basically borrow a percentage of your existing stock at the prime rate with 1 or 2% added as a service fee to borrow against it. The great thing about this is that your stock will not be lost. After the loan is paid back in full, you have full access and control to your stocks. Attaining a loan through stock ownership, is a fairly straight forward process. A lot of people will use this money for large purchases such as buying a house, sometimes a car, and possibly also other bigger investments.  They may do this at their own risk or under the supervision of a financial broker.

A stock loan can be a great alternative to a traditional loan, or selling your valuable property in exchange for money. Stock loans are not as risky as some other options out there, they come with little liability, if you default on your payments, the lender can only collect  your stock and you can keep the proceeds of the loan.  If you are interested in taking out a stock loan from your portfolio, your biggest worry will be finding a reputable lender. Your first step should be to research companies that will help you with stock loans, get quotes and make comparisons and find out the implications and terms of the loan. Also, talk to a financial advisor if you can, they are good at helping people with tough financial decisions to make. It is very important at this stage in the game to read every detail pertaining to your loan and keep an eye out for any hidden fees or unexpected surprises.