Stock Loans
Stock-secured loans use securities as loan stock collateral and offer stock loans where the securities have been hedged against potential loss to deliver secure financing for a wide range of funding applications. Most of these stock hedge loans are limited-recourse or non-recourse stock loans, so that the lender's right to pursue asset recovery is limited to the stock shares themselves and with no credit bureau reporting. Some stock loans are non-callable and others permit early prepayment.

Investment Diversification
Sometimes investors struggle with how much of their portfolio should be in stocks versus other alternative investments, such as real estate, small business or lending? Well, what if they didn't have to make that choice and What if there were a way to keep all of your stocks and have some cash that you could invest in other types of investments?

Stock Secured Loans
While it may seem like getting a loan to go to the casino there is a number of stock loan programs offered internationally. The reason is that most investors with stock laden portfolios that seek investment diversification may be good candidates to receive stock loans. These stock loans permit the stock holders to borrow up to 90 percent of the value of their stock.

No Margin Calls
The stock loans don't have any margin calls and the money borrowed can be used for anything the investor wants except buying more stocks. So homes, yachts, Lear jets, vacation homes, professional sports teams, politicians, and other investments maybe come more within reach of the investor that has money tied up in the stock market.

Non-Recourse Loans
Interestingly, these stock loans are what is known as non-recourse loans. This means that the collateral for the stock loan is the stock itself and the credit and possessions of the borrower and not involved or at risk if the loan is defaulted upon. The loan becomes a hedge for the stock of the borrower and if the stock value drops the borrower walks away from the loan obligation and owes nothing.

Stock Loan Financing
The companies that offer stock loans charge interest fees and loan origination fees which are typically 3 to 5 percent and the loan interest rates for major stocks can be from 4 to 11 percent and will depend on the type of stock loan. The stock loan borrowers pay interest payments monthly or can allow interest to accrue to maturity which will add to the balance of the loan, but most borrowers choose to pay off the loan interest at the end of the loan and pay off the balloon style loan.