How Using Stocks as Collateral for a Loan Works in 2026

You can use stocks as collateral for a loan, usually through a margin loan or a securities-based line of credit (SBLOC). Rates are often lower than an unsecured bank loan, and depending on the loan type, you can use the money for almost anything. The trade-off is real, though. If your portfolio drops in value, the lender can issue a maintenance call. If you can't cover it, they can sell your shares to cover the balance.

Key Takeaways

• You can use stocks as collateral for a loan through a margin loan or an SBLOC. Both let you borrow against your portfolio without selling your shares or triggering capital gains tax.

• How much you can borrow depends on the loan type and your holdings. Margin loans cap around 50% of value, while SBLOCs can reach 50% to 95% depending on your assets.

• A drop in your portfolio can trigger a maintenance call with little warning. If you can't add cash or collateral, the lender can sell your shares, sometimes creating a taxable event.

• Consider an unsecured loan instead if you qualify for a competitive rate. Borrowing against retirement accounts generally isn't allowed, so weigh the risk before you pledge.

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What Is Collateral?

Collateral is any asset of value you own that can be used to secure a loan. 

• Real estate, savings accounts, investment accounts, cars and — yes — stocks, can be used as collateral. 

• For an asset to be used as collateral, the lender must accept it as such, it must be in your name and it must have enough value to get a loan. 

• When you use an asset as collateral, you give the lender the right to liquidate your asset to recover its funds if you cannot keep up with your debt obligations. 

• Borrowing against stock portfolios comes with additional risks because the value of the collateral may drop. If it drops, you’ll likely be responsible for the difference.  

How Does Using Stocks as Collateral Work?

Stocks can be used as collateral for either a margin loan or SBLOC.

• Margin loans: Typically short-term loans offered by your investment brokerage.

• SBLOCs: Generally offered by a bank or non-bank lender affiliated with your broker.

You may also see these loans referred to as securities-backed loans, stock-based loans or stock collateral loans.

Here's how the process works:

1. The lender evaluates your portfolio: It reviews the value of your stocks and may also consider factors such as your credit score and income.

2. The lender determines how much you can borrow: Most lenders allow you to borrow up to 50% to 95% of your portfolio's value, depending on loan type. For example, if you have a $10,000 portfolio, you may qualify for a margin loan of up to $5,000 or an SBLOC of up to $9,500, although exceptions may apply.

3. You access your funds: Once approved, you can draw from the line of credit as needed and make interest payments according to the loan terms.

4. You repay the loan: You'll repay the principal and any remaining interest based on your agreement with the lender.

In some cases, you may need to transfer ownership of your stocks to the lender for the duration of the loan.

Margin Loans vs. Securities-Based Lines of Credit

Margin loans and SBLOCs are complicated financial instruments that share some features but differ in important ways. Here’s how they compare.

How To Get a Loan Using Stock as Collateral

Here’s how to get a loan using stock as collateral under the two most common scenarios.

1. Choose the type of loan you want: Select a margin loan for short-term financing for securities purchases or other uses. Consider a SBLOC for longer-term financing for expenses other than securities purchases.

2. Review your portfolio: Confirm that your securities are eligible for use as collateral for the type of loan you want. Retirement account assets, for example, are ineligible.

3. Calculate the value of your eligible assets: Your maximum loan amount depends in part on the value of your collateral.

4. Ask about rates: Most margin loans and SBLOCs have variable rates, so find out how often your rate might change and whether the brokerage or lender caps increases.

5. Evaluate your cash reserves and the value of non-collateral assets: In the event of a maintenance call, you’ll need to add equity to your account or else the broker/lender can sell your assets.

6. Decide how much to borrow: Weigh your cash needs against the value of your collateral-eligible assets, the minimum maintenance collateral required, and your ability to cover maintenance calls.

7. Apply for the loan: For a margin loan, log into your brokerage account to apply for a margin account. For a SBLOC, contact your brokerage.

Pros and Cons of Using Stocks as Collateral

Understanding the benefits and drawbacks of using stocks as collateral before you take out a loan can help you avoid an expensive mistake.

Other Assets You Can Use to Secure a Loan

Stocks aren’t the only assets that can be used to secure a loan. Other options include:

• Bonds

• Mutual funds

• Exchange-traded funds (ETFs)

• Broker certificates of deposit (CDs)

• Real estate

• Boats

• Cars

• Artwork

As long as the assets are in your name and hold enough value to cover the loan, they can be used as collateral unless restricted by law or the lender’s collateral requirements.

What To Know Before You Borrow Against a Stock Portfolio

Before borrowing against a stock portfolio, consider your financial needs, risk tolerance, portfolio diversification, available interest rates for bank loans and your ability to cover maintenance calls.

Be sure you can answer these questions before using stocks as collateral for a loan:

1. How much are you borrowing?

2. What is the annual percentage rate (APR)? 

3. How often can my variable rate change, and how much can it change?

4. How much are the monthly payments?

5. When do I start making principal payments?

6. What happens to my collateral if I can’t repay the loan?

MoneyLion offers a service to help you find personal loan offers. Based on the information you provide, you can get matched with offers for up to $100,000 from our top providers. You can compare rates, terms, and fees from different lenders and choose the best offer for you.

Is Borrowing Against a Stock Portfolio Right for You?

Whether or not you should use stocks as collateral depends on your unique financial situation and goals. 

Consider borrowing against your stock portfolio if:

• You want to access the equity without selling your stocks

• You have a high tolerance for risk

• You have enough assets to cover a maintenance call

Consider another option if:

• You qualify for a competitive rate on an unsecured loan

• Your stocks are mainly held in a retirement account

Borrowing Against Your Portfolio FAQs

Still weighing whether to pledge your investments for cash? Here are answers to the questions people ask most about borrowing against a stock portfolio.

What’s the difference between a margin loan and a securities-based line of credit?

The main difference is that you can use a margin loan to purchase more investments. Funds from an SBLOC may not be used to purchase securities or fund a brokerage account.

Can you use stocks as collateral for a mortgage?

No. A mortgage is secured by the home you're financing, so you generally can't use stocks as collateral for the mortgage itself. However, you may be able to use your stocks as collateral for a bridge loan to help cover the down payment on a new home while you wait for your current home to sell.

Keep in mind that taking out a margin loan or SBLOC could affect your mortgage application. If your portfolio loses value, it could increase your debt-to-income (DTI) ratio or reduce your available cash reserves, making it harder to qualify for a mortgage.

Can you borrow against stocks?

Yes, you can borrow against stocks. You can get a margin loan to purchase other securities. You can also consider a SBLOC. Which option will work for you depends on whether you’re looking for bridge financing, short or long-term liquidity, or whether you plan to make other stock purchases. 

How much can you borrow against a stock portfolio?

The maximum you can borrow depends on the loan type. A margin account typically lets you borrow up to 50% of the market value. You can often borrow up to 95% with a SBLOC.

What happens if the value of your stocks falls after you borrow?

A reduction in value reduces your equity in the stocks. If the equity falls to less than the broker/lender’s collateral maintenance requirement, you’ll have to deposit cash, transfer additional assets into the account or sell assets to restore your equity to at least the minimum.

What other assets can be used as collateral?

Real estate and vehicles are the most common types of collateral. However, you could use investments, business assets, artwork, jewelry and other valuables as collateral. If you have other assets, such as a rare coin collection or significant gold, that could also be used as collateral. 

What is the interest rate for borrowing against a stock portfolio?

Interest rates for borrowing against a stock portfolio are typically variable, tied to the federal funds or prime rate. Each broker or lender sets its own rates for borrowing against a stock portfolio. You can speak with your lender or financial institution to understand the current best available rates.

Key Terms

• Collateral: Any asset of value you pledge to secure a loan. If you don't repay, the lender can seize or sell the asset to recover its money.

• Margin loan: A short-term loan from your brokerage that uses securities in your margin account as collateral, usually to buy more investments. Regulation T caps initial borrowing at 50% of the securities' value.

• SBLOC: A revolving credit line from a bank or lender secured by your investment account, usable for almost anything except buying securities. You can't use the funds to purchase or trade securities.

• Maintenance call: A demand from the lender to add cash or assets when your portfolio's value falls below a required threshold. If you can't meet it, the lender can sell your holdings.

• Variable rate: An interest rate that can change over time, usually tied to a benchmark like SOFR or the prime rate, so your borrowing cost can rise or fall.

• Demand loan: A loan the lender can require you to repay in full at any time, which is how SBLOCs are typically classified.

Summary generated by AI, verified by MoneyLion editors

 Sources

• U.S. Securities and Exchange Commission. "Understanding Margin Accounts."

• Edward Jones. "Reserve Line of Credit."

• Fidelity. "Using your securities to borrow money."

• Charles Schwab. 2026. "3 Ways to Borrow Against Your Assets."

• Consumer Financial Protection Bureau. 2024. "What is a mortgage?"

Alison Kimberly contributed to the reporting for this article.