One of the lesser-known benefits of a brokerage account is what’s called a portfolio line of credit, also known as a margin loan. With a portfolio line of credit your broker will lend you money against the value of your securities portfolio, using your stocks, bonds and funds as collateral for the loan. The larger your portfolio, the larger the amount you can borrow.
Here’s how a portfolio line of credit works and whether you should consider using one.
How a portfolio line of credit works
Many brokers allow their clients to take out a portfolio of lines of credit