Unsecured Loans Using Stock

Unsecured loans using stock require planning and a lot of thought. It is important to understand all the details of unsecured loans using stock before deciding to borrow against them. Here are some things to think about. What are your other options for borrowing money and what are the penalties or responsibilities of that loan? What is the interest rate and fees involved with this loan? Do you need collateral to open this loan? As yourself these questions about each loan option you look at. Let's look at the answers to these questions about unsecured loans using stock. The interest rates involved with an unsecured loan using stock are usually prime rate with one to two percent added for the service of being able to borrow against your stock. Remember, you will get your stock back when you repay the loan. You will not lose your stock for any amount of time during the loan. However, if the stock has gained value during the time from the beginning of your loan to the end, you will have to pay the difference to get the stock back. Basically the lender holds your stock for you and you have to pay if it grows. You do not need collateral to utilize unsecured loan using stock. Or to think of it another way, the 'collateral' you are using is the stock itself. Because the stock is held by the lender, it is only he that can decide to give the stock back. But for purposes of offering anything else as collateral, there is no collateral needed. Borrowing against unsecured loan using stock can be beneficial because you can borrow without tangible collateral, however, you take a risk that you will owe money in the end if your stock grows. Unsecured loan using stock is ideal for a person that cannot get a loan any other way or does not have collateral, but has stock. You obviously cannot borrow an unsecured loan using stock if you do not own stock. These are not small loans. Most companies will have a minimum amount you can borrow. This will probably be in the 10s of thousands of dollars. The best thing to do is contact your stock holder for more information concerning unsecured loan using stock to find out specific details about their company. Borrowing an unsecured loan using stock is not always the best option. Talk with your advisor to find out your best options. Ask lots of questions and never make a decision before you feel completely comfortable with the information you have gathered.