Investment Loan Rate Research: Finding Competitive Lenders

The Federal Reserve Board sets the broker call loan or investment loan rate that is available for margin accounts held at brokerage firms. Like all interest rates set by the Fed, this rate establishes the minimum amount that firms charge on loans made on investments held by investors at a brokerage firm.

Regulation T

The federal government permits brokerage firms to extend credit to their investment customers in margin accounts under Regulation T. This permits an investor to borrow up to 50 percent the value of marginable securities held in the account. The money borrowed can be used for any purpose the account holder desires, provided that they may be required to pay back the loan if the value of the account falls.

Finding Rates

Finding competitive margin loan rates for investments is easy to accomplish most every brokerage firm publishes these rates online and they can be found online. It is a good ideal to compare rates between different firms in order to obtain the best rate for your investment loans.

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