Stock-Secured Loan Requirements

A stock-secured loan uses the original certificate of stocks you own as collateral. The bank or lender holds on to this certificate and issues a loan up to a certain percentage of its value. You continue to earn dividends and appreciation on the value of the stock, but you also achieve immediate liquidity for your current situation. To capture the advantages of a stock loan, you must meet basic requirements, including:

Own stock - The most basic requirement is that you own stock immediately available for collateral. If you are not the sole owner of the stock certificate, you cannot collateralize the stock for a loan.

Have good credit - Even with a secured loan, there will be basic credit requirements. If you have bad credit, you may need to seek a specific bad credit loan in order to get the financing you are looking for. 

Have an income - It is nearly impossible to get a loan unless you have an income. Proof of your income is the way a lender knows you can meet basic monthly payment requirements.

 


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