A securities-backed loan (or Share Secured Loan) is a smart financing solution where your investments (stocks, bonds, life insurance) serve as collateral for the bank.
It’s an ideal option if you need liquidity without wanting to sell your assets and lose potential gains.
They can help you
How does it work?
Collateralization: You pledge your securities as collateral to the bank.
Loan-to-value ratio: The bank typically lends you between 50% and 80% of your portfolio’s value (to compensate for market volatility).
Profit protection: You continue to receive dividends and benefit from any potential price increases.
Why is it advantageous?
Highly competitive rates: Because the risk for the bank is virtually zero (it can seize the securities), the APR is often much lower than a standard personal loan, hovering around 2% to 4% in 2026.
Speed: Funds are released very quickly because the creditworthiness assessment is based on your existing assets.
Tax optimization: You avoid capital gains tax that you would have incurred by selling your securities for cash.
Risks to watch out for
Margin call: If the stock market falls and the value of your securities becomes insufficient to cover the loan, the bank may ask you to add capital or sell your securities at the worst possible time.
Security lock: For the entire duration of the loan, you cannot sell the pledged securities without the bank’s approval.