Should I borrow against my investments?

Borrowing against your investments is usually a cheaper way to take out a loan when compared to credit cards or bank loans, since the loan is backed by collateral. But you’ll want to check how much a portfolio line of credit costs at your institution.

Can you borrow money from a bank?

The bank uses your savings—stocks, bonds, cash, and sometimes other forms of securities—as collateral to offer you a loan or line of credit. 1 These loans and lines of credit typically have variable interest rates. How much you can borrow is up to your bank, but you may be able to access 50% of the total amount of your investments, or even more.

Should you borrow against your assets?

Borrowing against your assets may also come with additional risks, since the assets need to maintain a certain amount of value for the duration of your loan. "In general, this type of leverage should be used when you're confident you can repay the loan quickly,” says Lou Gentile, advanced planner at Fidelity.