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Should I use a portfolio line of credit?

Sure, you could make a loan or use other lending alternatives. But, using a portfolio line of credit can be smart due to the low interest. See the typical interest of the alternatives: With IBKR, you can borrow against your portfolio as low as 5.830% APR.

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.

How much does a portfolio line of credit cost?

Clients often pay no fees to set up these lines of credit and are only charged interest on the amounts borrowed. A portfolio line of credit can be an effective backup source of liquidity that helps insulate a portfolio from untimely liquidations, capital gains and loss of investment income.

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