What is a portfolio line of credit?

While we typically think of our investments as a form of wealth-building, they can also come in handy when we need cash fast. Through what’s called a portfolio line of credit (also known as a “margin loan”), investors can borrow against their taxable brokerage account at a moment’s notice.

What is a portfolio line of credit (margin loan)?

Through what’s called a portfolio line of credit (also known as a “margin loan”), investors can borrow against their taxable brokerage account at a moment’s notice. In other words, an investor can use their stock holdings and other investments as collateral for a loan while their money stays in the market.

Can a broker take out a portfolio line of credit?

Many brokers allow their clients to take out a portfolio line of credit using the securities in their account as collateral for the loan. You can borrow against the account and generally use the money for whatever purpose you’d like, potentially even just buying more securities.