By definition, a stock loan is a non-recourse loan where the borrower uses the value of their stock or portfolio to obtain funds from the lender. You would generally pay below the prime interest rate for the whole term of the stock loan, and will have many options at the end of this term. Some of these options include the refinancing of the loan, as well as the ability to receive back your portfolio with appreciation, after it has been paid off.

Stock loans can benefit you in a wide variety of ways. They provide a means to use only your stock for collateral, and as they are non-recourse loans, will assist in protecting your assets in case the loan repayments fail. Additionally, most stock loans will allow you to benefit from the proceeds of the stocks during the active stages of the loan.

Margin loans generally provide a much lower LTV than a stock loan. Additionally, margin loans tend to usually require that the borrower have a positive credit rating with a higher rate of interest. As opposed to a margin loan, stock loans enable the borrower to walk away from the loan without affecting their credit rating, if the collateral is insufficient in covering the loan.

If you find yourself in the position where you cannot pay off the stock loan within the time frame originally specified, the lender will retain ownership of the stock that you have provided as collateral. In the event of the stock depreciating, with the remaining balance unaccounted for, the borrower will have no further obligations to the lender. This means that the difference is a loss to the lender.

Fortunately, one of the best things about stock loans is that they can be accessible to people who may have a less than average credit history. Seeing as though you will be using securities as collateral, the lender will be able to get the balance of the loan back – perhaps even profiting if the stock happens to appreciate. Stock loans are widely known to be a much lower risk alternative to unsecured personal loans.

As long as you remember to seek out enough information as possible, and find a reputable lender, stock loans are perfectly safe. Beware of disreputable lenders who will not agree to the terms and conditions being written down - or who request that you transfer ownership of the stock before the agreement has been completely finalized.

The amount that your loan will be approved for is based upon a number of factors. Obviously, the value of your stock will play an integral role in the amount that you are approved for. The loan-to-value that can be offered is based solely upon market conditions, market sector, historical stock performance - as well as the anticipated performance of the stock in the future.

Funds will often be available between 48 and 72 hours, depending upon the amount requested, and the other factors such as what type of securities have been used for collateral. The application process is relatively quick and simple, from start to finish.

Please visit our eligibility page, to see which securities can be borrowed against. Additionally, keep in mind that HedgeLend cannot lend with US citizens. Remember that the minimum loan size for the HedgeLend stock loan is $75,000 USD.

Stock loans are never reported to either the credit bureau or any reporting agencies. Even if the borrower elects to walk away from the loan, and defaults due to having more money than the entire worth of the stock - they will still not be reported.