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Personal loans can be either secured or unsecured. A secured personal loan has collateral that backs the borrower’s promise to repay the loan. An unsecured personal loan does not require collateral, and the only thing backing the borrower’s promise to repay is their creditworthiness.

The collateral requirement is the main difference between secured and unsecured personal loans, but there are other differences that may inform your decision about which type of loan is best for your financial needs.

What Is a Secured Personal Loan?

It is a truth universally acknowledged, that a lender in possession of funds must be in want of a borrower who is able to repay a loan.

Literary jest aside, it’s not much of a stretch to imagine that lenders appreciate security. When they lend money, they fully expect to be repaid in money — or an asset of some value.

Enter the secured personal loan.

A secured personal loan is a loan for which the borrower pledges collateral that the lender can take possession of if the borrower fails to repay the loan. Put in simpler terms: If you default on your car loan, for example, the bank can repossess your car. For the lender, collateral equals a certain level of security.

Collateralized loans are common for mortgage and auto loans. A home is collateral for a mortgage, and a vehicle is collateral for an auto loan. They are somewhat less common for personal loans, though.

A personal loan isn’t tied to a particular asset in most cases, so there’s not an obvious item to pledge as collateral. The asset pledged must be owned by the applicant, and the lender will evaluate its value to be sure it’s equal to the amount of money being loaned. In some cases, a physical asset such as a vehicle is put up as collateral, but the collateral could also be an asset like a savings account or certificate of deposit.

Pros of Secured Personal Loans

While it may seem like the lender benefits more with a secured personal loan, there may also be advantages for the borrower.

•   Lenders typically see secured personal loans as less risky than their unsecured counterparts because there is an asset to back the loan if the borrower defaults.

•   Borrowers may get a lower interest rate on a secured personal loan than they might on an unsecured personal loan.

•   Secured personal loans can be a good way for borrowers to build credit, as long as they make regular, on-time payments.

Cons of Secured Personal Loans

Things that a borrower might see as a drawback to a secured personal loan might be a benefit to the lender. But each party to the loan agreement takes risks.

•   The lender is able to recoup its losses by seizing the collateral if the borrower defaults on their secured personal loan. However, it may take awhile to liquidate that asset. If the collateral is a physical asset, such as a vehicle, it may take some time to find a buyer willing to pay the price the lender has set.

•   For the borrower, the main drawback to a secured personal loan is the possible loss of the asset pledged as collateral if they default on their loan.

•   The application and approval process may include more steps for a secured personal loan than an unsecured one because the asset’s worth will need to be valued.

What Is an Unsecured Personal Loan?

A personal loan that is backed mainly by the creditworthiness of the borrower is an unsecured personal loan. Sometimes called a signature loan, an unsecured loan does not require any collateral to guarantee the loan.

Defaulting on an unsecured personal loan can certainly have a negative effect on the borrower’s credit, but there wouldn’t be an asset to lose in addition.

Pros of Unsecured Personal Loans

Like their secured counterparts, unsecured personal loans can have benefits for both lender and borrower.

•   Lenders may be able to charge a higher interest rate on an unsecured personal loan because there isn’t any collateral to secure the loan. (This is a drawback for the borrower — see below.)

•   The borrower won’t lose an asset if they default on an unsecured personal loan.

•   The application process for an unsecured personal loan is generally much quicker than for one that’s secured because there is no asset to be valued.

•   Funds may be disbursed the same day or within a week, depending on the lender.

Cons of Unsecured Personal Loans

It may be relatively easy to find lenders who offer unsecured personal loans, but there are aspects that may be considered drawbacks.

•   Interest rates on unsecured personal loans may be higher than for secured personal loans because there is no asset backing the loan.

•   Some lenders may have minimum credit score requirements for approval of an unsecured loan, so applicants with poor credit may not qualify.

•   If the borrower defaults, their credit score may be negatively affected.

•   Applicants with lower credit scores may not qualify for loan amounts as high as those with higher credit scores.

Choosing Between Secured and Unsecured Personal Loan

There are lots of reasons for considering a personal loan in general, but choosing between a secured and an unsecured personal loan means taking some specifics into account.

Do You Have Collateral?

One of the main things to consider when thinking about applying for a secured personal loan vs. an unsecured personal loan is whether you have an asset of value that you’d be willing to risk.

If you do have such an asset, you may want to compare lenders who offer secured personal loans. Some online lenders offer secured loans, but they’re more commonly available through banks or credit unions.

Lenders may offer higher loan amounts for a loan backed by collateral than for one that isn’t, so if you need to borrow a large amount, it might be worth looking into a secured personal loan.

What Are You Planning To Use the Funds For?

Personal loan funds can generally be used for a wide variety of things, like debt consolidation, unexpected medical expenses, home improvement costs, and more.

If you need funds to pay multiple vendors or contractors — common in the case of wedding or home improvement costs — or you plan to consolidate other high-interest debt, an unsecured personal loan might be the right choice for you.

If you plan to purchase a specific item that might be considered an asset, however, the lender may want to attach that asset as collateral on the loan, thus making it a secured loan. Examples of this might be a secured personal loan to purchase land or to buy a boat.

What Type of Lender Is Right for the Loan You Need?

Another factor to consider when choosing between a secured or unsecured personal loan is the type of lender you’d rather work with.

Unsecured loans may be available through banks, credit unions, or online lenders. Not every financial institution offers unsecured loans, however. Secured loans are more commonly offered by banks and credit unions — it’s less common to find one through an online lender.

If you have a savings account or certificate of deposit at your bank that you’d be willing to put up as collateral, it might be worth looking into a secured loan with your current bank.

Qualifying For a Personal Loan

There are different factors that go into qualification for a personal loan.

Each lender may have its own credit score, income, or debt-to-income ratio requirements, in addition to other factors. If you’re applying for a secured personal loan, each lender may have its own requirements for valuation of collateral.

It’s a good idea to compare lenders so you’ll have an idea of what they commonly require for an applicant to qualify for a personal loan. With that knowledge you can better evaluate your own credit for the likelihood of being approved — or not.

Reviewing Your Credit Report

You can get a free copy of your credit report annually from each of the three major credit bureaus: Equifax™, Experian™, and TransUnion™. It’s a good idea to check all three because not all lenders report payment history to all three bureaus. The credit bureaus don’t share information with each other, so getting a complete picture of your credit may mean looking at all three reports.

Your credit report contains personal information about you and information about past and current credit accounts in your name.

Personal information includes:

•   Name, current as well as any other names you may have gone by in the past.

•   Addresses, current and previous.

•   Birthdate.

•   Social Security number.

•   Employer.

Lenders typically report:

•   The total amount of the installment loan or line of credit.

•   Your record of on-time payments.

•   Any missed payments.

If you’ve had any bankruptcies, foreclosures, or repossessions, they will likely be included on your credit report, as well.

If there is missing, incomplete, or incorrect information on your credit report, you can file a dispute with the credit bureau. It’s a good idea to clear up any errors before you start applying for a loan so you don’t have any unexpected roadblocks on the way to qualification.

If, in the process of reviewing your credit report, you find that you don’t have much of a credit history or your credit isn’t up to qualification standards, you may decide to take some time to work on improving your credit situation. That could mean increasing your income, lowering your expenses, paying down or consolidating existing debt, or just learning how to better manage your overall finances.

The Takeaway

There are situations where an unsecured personal loan might be the right financial tool for you, and there may be others that would be better suited to a secured personal loan. The main difference between the two types of loans is that one requires collateral — a secured personal loan — and the other doesn’t — an unsecured personal loan. Deciding between the two depends on the borrower’s willingness to risk the loss of collateral, as well as their overall creditworthiness.

If you decide that an unsecured personal loan is the right type of loan for you, a SoFi Personal Loan might be a good choice. There are a variety of loan terms available with competitive, fixed rates and no fees, so there may be an option that works for your budget.

Find a SoFi Personal Loan to fit your financial needs

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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The pandemic may have slowed consumer spending over the last few years, but spending is on the rise again — along with consumer debt. Americans carry, on average, three credit cards and have $5,525 in credit card debt. Overall, U.S. credit card debt is $71 billion higher than it was one year ago.

That amount of debt can be a challenge to pay down along with regular monthly household expenses. Some people may choose to refinance their high-interest credit card debt in an effort to secure a lower interest rate or a lower monthly payment. Refinancing credit card debt can be one way to make progress toward eliminating it completely.

What Is Credit Card Debt?

If you’re putting more purchases on credit cards than you can pay off in a monthly billing cycle, you have credit card debt.

Interest will accrue on the balance that carries over to the next billing cycle. If you don’t pay at least the minimum amount due, you’ll likely also be charged a late fee. Since credit cards use compound interest, you’ll be charged interest on accrued interest and fees. That can add up quickly and make it more difficult to get out of debt.

Carrying a balance on more than one credit card can make the debt even more difficult to manage. If your goal is to be free of credit card debt, refinancing can be one way to achieve that.

What Are Some Benefits of Refinancing Credit Card Debt?

Credit cards are revolving debt and typically have variable annual percentage rates (APRs).

Refinancing credit card debt with an installment loan that has a fixed interest rate, such as a personal loan, will mean you’ll have a fixed end date to your debt and will have the same APR for the entire term of the loan.

If you’re refinancing multiple credit card balances into one new loan or line of credit, you’ll have fewer bills to pay each month. That could potentially make monthly budgeting a simpler task.

How Might Debt Refinancing Affect Your Credit Score?

Something to keep in mind when your goal is to pay down debt is that it’s a long game.

That being said, in the short term your credit score can decrease slightly when you apply for new credit and the lender looks at your credit report. During the formal application process, the lender will perform a hard inquiry into your credit report, which may result in a slight temporary drop of your credit score.

If you’re comparing multiple lenders, and they offer prequalification, they’ll do a soft inquiry into your credit report, which won’t affect your credit score.

Building your credit — or rebuilding it — through refinancing credit card debt can be possible if you make on-time, regular payments on the new loan. Reducing your credit utilization can be another positive result of refinancing credit card debt. Both of these can potentially increase your credit score.

It’s important not to overuse the credit cards you refinanced into a new loan, however, or you might accumulate even more debt than you started with.

Will Canceling My Unused Credit Cards Affect my Credit Score?

After you’ve refinanced your existing credit card debt into a new loan, you might be tempted to cancel those credit cards. But that strategy could negatively affect your credit score.

Whether it’s a good idea to cancel a credit card really depends on the card. If you’ve had the credit card for a long time, closing it would shorten your credit history, which could result in a credit score drop. But if it’s a card you genuinely don’t have a reason to keep, such as a retail card for a store you no longer shop at or a card that has a high annual fee that can’t be justified with your current spending habits, closing the account might be the right step for you.

If you plan to keep a credit card open, it may be a good idea to use it for a small, recurring charge so the card issuer doesn’t close it for inactivity. Setting up autopay can make this a convenient way to ensure the card stays open but is paid in full each month.

What Are Some Options for Refinancing Credit Card Debt?

Your overall creditworthiness will be a determining factor in finding available refinancing options. Lenders will look at your credit report and credit score, paying attention to how you’ve handled credit in the past and how much total debt you have in relation to your income.

Balance Transfer Credit Card

If you can qualify for a low- or no-interest credit card, you could use it to transfer a balance from another credit card. You’ll typically be charged a balance transfer fee equal to a percentage of the balance you’re transferring. The promotional rate on these types of cards is temporary, sometimes lasting up to 18 months or so, but can be as short as 6 months.

If you pay the transferred balance in full within the promotional period, you may not pay any interest at all, or a minimal amount. However, if you still have an outstanding balance on the card when the promotional period is over, the APR will revert to the card’s standard rate for balance transfers.

Home Equity Loan

A potential source of refinancing funds might be your home, if you have equity in it. Funds from a home equity loan can be used for just about anything, even things unrelated to your home. You can calculate how much equity you have in your home by subtracting the amount you owe on your mortgage from the current market value of your home.

In addition to the amount of equity you have in your home, lenders will typically also look at your income and your credit history to determine how much you might qualify for. It’s common for lenders to limit a home equity loan to no more than 80% to 85% of the equity you have in your home. There are typically closing costs with a home equity loan including appraisal fee, title search, origination fee, or other fees, and can be between 2% and 5% of the loan amount.

A home equity loan is a second mortgage secured by your home. If you fail to repay the loan, the lender can foreclose on your home.

Debt Consolidation Loan

Some lenders offer loans specifically for debt consolidation. These are actually personal loans, the funds from which can be used to pay off your existing credit card debt. Then, you’ll be responsible for repaying the debt consolidation loan. There may be fees charged on this type of loan, so be sure to look over the loan agreement carefully before signing it.

For a credit card consolidation loan to be as effective as possible at reducing your debt, it will ideally have a lower APR than you’re paying on your credit cards. In this way, you would be paying less in interest over the life of the loan. If a lower monthly payment is your goal, you may opt for a longer-term loan, but may pay a higher interest rate.

The Takeaway

Have you resumed pre-pandemic spending habits? If your credit card debt is piling up and you’re finding it challenging to pay it down, you may be considering refinancing. Some credit card refinancing options include balance transfer credit cards with a promotional APR, a home equity loan, or a debt consolidation loan.

A SoFi Personal Loan for debt consolidation may be one option to consider. Personal loans offered by SoFi have competitive, low fixed rates and no fees. You can see the rate you qualify for in just one minute without affecting your credit score.^*

View your rate on a SoFi Personal Loan

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^*Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.
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Investing can seem like a foreign language sometimes. There are myriad acronyms and much lingo to learn, even if you’ve been at it a while.

There are IRAs, 401(k)s, 403(b)s, stocks, bonds, common stock, preferred stock, index funds, exchange-traded funds (ETFs), real estate investment trusts (REITs), and a lot more. And that does not even touch all the ways you can invest, like selling short and fractional sales; or the various order types like limit orders, stop orders, and stop-limit orders.

Then there’s margin trading, which can be confusing because it comes with a lot of rules — and a lot of specialized words and lingo. Maybe you’ve heard of it, maybe the term is wholly new, or maybe you’re thinking about getting into margin trading yourself.

What is margin, actually? How is it different from the way you might be buying stocks, ETFs, index funds, and other investments now? What are the potential benefits? What might some be of the risks associated with margin trading? And how do you get started?

Margin trading might seem a more complicated than some other ways to invest in the stock market, but it’s a method that many investors favor — especially by experienced investors.

What Is Margin Trading?

Margin trading is an advanced investment strategy in which you trade securities using money that you’ve borrowed from your broker to magnify your return. Margin is essentially a loan where you can borrow up to 50% of your security purchase, and as with most loans, a margin loan comes with an interest rate and collateral.

Trading on margin is similar to “buying on credit.” Using margin for a trade is also known as leveraging.

The margin interest rate depends on how much you borrow and your relationship with the broker. Cash and stock are popular forms of collateral typically used by margin traders and are based on the account’s size and type of security being traded. Traders must also maintain a margin balance, known as the maintenance margin, in their accounts to cover potential losses. We cover the topics of interest, maintenance margin, and other details in the section, “How Does Trading on Margin Work?”

Margin trading is a bit more complicated (and risky) than some other ways to invest in the stock market, but it’s a method that numerous traders favor — especially the more experienced ones.

Below, we dive into how using margin is different from other ways of investing. We explore the potential advantages and risks of margin trading, along with the regulations and other ins and outs of margin trading. And, if you feel ready to use this technique, we discuss how to get started.

How Does Trading on Margin Work?

There are different ways to buy stocks, funds, bonds, and other securities. You might buy one share of a company at its full price. You might buy a fractional share, which means you purchase a portion of a share of stock, not the entire share. Or, you might put $10 a week into an ETF that’s comprised of stocks from a particular industry or sector that you like.

Margin trading is a little different from these approaches. Trades are made using some of your money and someone else’s, usually a brokerage firm’s. Here’s how it works.

•   As the investor, you take out a loan from your broker on an investment that you hope will rise in value, with the aim of seeing a return. When you sell the investment, you return the borrowed funds to the broker, and you keep the profits. Or, you may short stocks on margin, in which case you hope that the value declines,

•   For example, say you wanted to buy $5,000 worth of stock in an asset that you believe has had a big year in revenue. You could use $2,500 of your own money. The brokerage firm might lend you $2,500 to make up the difference; so the total investment would be $5,000 for an initial cost to you of only $2,500.

•   To execute such a trade, you’d need to open a margin account with a brokerage firm. The broker, as well as FINRA, generally require a minimum deposit to open a margin account, and the account balance acts as collateral against the loan.

•   In addition, the loan typically includes interest. The person borrowing the money for the margin trade is responsible for the amount owed plus interest. If the stock drops in value, the investor would still be responsible for the $2,500 plus any interest on the loaned amount.

•   On the flip side, if the stock goes up instead of down, and you used a margin account, then your purchasing power and potential could increase.

You can also use a margin account for shorting stock. This means that you sell a security you do not own. An investor can borrow a security, then sell it; then buy it back later for less money. A short-seller is betting on, and profiting from, a drop in a security’s price.

Margin exposes the investor to potentially greater gains or losses and is a riskier way to invest than not using margin.

The Language of Trading on Margin

As we said above, margin trading is slightly different from some other ways to invest; such that, it’s developed its own set of related terms. Before you embark upon margin trading, it might help to familiarize yourself with some of them.

Margin Account

This is the type of brokerage account you’ll need to begin trading on margin. It means the brokerage firm will lend funds for stock purchases.

Financial Industry Regulatory Authority (FINRA)

Financial Industry Regulatory Authority (FINRA) is a nonprofit agency organized by Congress. This organization oversees margin trading by writing and enforcing rules that govern the industry, ensuring brokerage firms’ compliance with those rules, and educating investors. FINRA’s goal is to help protect investors and regulate brokerages to ensure that they’re working in the best interests of American investors.

Minimum Margin

FINRA rules set a dollar amount that must be deposited based on the kind of margin trading to be executed. The amount may vary depending on the purchase amount of the investment and brokerage firm policies. And, it’s possible that brokerages might set higher minimums than FINRA does.

Initial Margin

The initial margin for new accounts is set at 50% by Regulation T of the Federal Reserve Board . Under FINRA rules, this amount must be $2,000 or 100% of the purchase price of the margin securities, whichever is less. This means that a $10,000 trade, for example, would require an initial margin of $5,000. Some brokerages might even ask for more than 50% as part of the initial margin. Keep in mind that this is FINRA’s rule; some brokerages may require a higher minimum margin.

Maintenance Margin

The maintenance margin specifies the amount of money that investors are required to keep in their margin accounts. According to the U.S. Securities and Exchange Commission (SEC), “FINRA rules require this ‘maintenance requirement’ to be at least 25 percent of the total market value of the securities purchased on margin (that is, ‘margin securities’).” This might mean investors might need to add cash to their margin accounts if the price of their investment drops significantly. For short sales, the minimum requirement is $2,000.

Margin Call

A margin call happens when the value of an investor’s margin account dips below the brokerage’s maintenance margin. The “call” is a request for the investor to meet the maintenance margin and usually happens when a security the investor purchased decreases in value. If you get a margin call, you may bring the account up to the minimum amount by depositing more funds, or assets, into the account, or selling off some securities in the account.

Once you’ve familiarized yourself with margin trading lingo and some basic stock market terms, it might be helpful to understand some potential benefits and risks of margin trading.

Potential Benefits of Margin Trading

•   Potential to enhance purchasing power. A primary benefit of margin trading is the potential expansion of an investor’s purchasing power, sometimes exponentially. This could possibly help boost returns if the price of the stock or other investment purchased with a margin trade goes up.

•   Possible lower interest rates. Benefits of margin loans might include lower interest rates — than other types of loans, such as personal loans — and the lack of a set repayment schedule. Margin loans are meant to be used for investing and generally should not be used for other purposes, although they can be.

•   Diversification. You could also use margin trading to diversify your portfolio.

•   Selling short. Another potential advantage might be a complicated trading method called short selling. Margin trading might make it possible for you to sell stocks short. Short selling differs from most other investment strategies in that investors make a bet that a stock’s price will fall.

•   The rules for short selling with a margin account can get even more complicated than a traditional margin trade. For instance, Regulation T of the Federal Reserve Board requires margin accounts to have 150% of the value of the short sale when the trade is initiated.

While the benefits of being able to buy more investments — and potentially make more money — might seem appealing to some investors, there are also some potential risks to using margin. It might be worth considering these before you decide if trading on margin is right for you.

Potential Risks of Margin Trading

•   Possible loss beyond initial investment. While a primary benefit of margin trading may be increased buying power, investors could lose more money than they initially invested. Unlike a cash account, the traditional way to buy stocks or other investments, losses in a margin account can actually extend beyond the initial investment.

   For example, if an investor purchases $20,000 worth of stock with a cash account, the most they can lose is $20,000. If that same investor uses $10,000 of their own money and a margin — essentially a loan — of $10,000 and the stock loses value, they may actually end up owing more money than their initial $10,000.

•   Possibility of margin call. Another potential negative aspect of margin trading is getting a margin call. Investors might need to put additional funds into their account on short notice if a margin call is triggered because the investment lost value. Moreover, a drop in value might mean an investor needs to sell off some or all of the investment, even at an inopportune time.

•   The SEC warns investors that they must sell some of their stock, or deposit more funds to cover a margin call. If you get a margin call, it is your responsibility to deposit more funds, add securities or sell holdings in your account. If you don’t meet the margin call after a number of warnings from your broker, then the broker has the right to sell all or some of the current positions to bring the account back up to minimum value.

How to Get Started With Margin Trading

Typically, the first step to getting started with margin trading is to open a margin account with a brokerage firm.

Even if you already have a stock or investment account, which are cash accounts, you still need to open a margin account because they are regulated differently. First-time margin investors need to deposit at least $2,000 per FINRA rules . If you’re looking to day trade, this dollar figure goes up to $25,000 according to FINRA rules. This is the minimum margin when opening a margin trading account.

FINRA defines a day trade as “the purchase and sale, or the sale and purchase, of the same security on the same day in a margin account.” These higher dollar amounts could be associated with what some have called the “greater risk of day trading.”

Once the margin account has been opened and the minimum margin amount supplied, the SEC advises investors to read the terms of their account to understand how it will work.

The SEC advises investors to protect themselves by

•   Understanding that your broker charges you interest for borrowing money,

•   Knowing how the interest will affect the total return on your investments,

•   Recognizing that not all securities can be purchased on margin,

•   Comprehending the details about how a margin account works, and

•   Being aware of possible outcomes should the price of assets purchased on margin decline.

Does Margin Trading Work for Your Goals?

That’s the question most investors will probably need to answer for themselves once they’ve learned the lingo, weighed the pros and cons, and figured out how margin trading works.

As with most investing strategies and vehicles, margin trading comes with a unique set of potential benefits, risks, and rewards.

Margin trading can seem a little more complicated than some other approaches to investing. As the investor, it is up to you to decide if the potential risks are worth the potential rewards, and if this strategy aligns with your goals for the future.

Want to explore what investing options might work with your goals? Check out automated or active investing with the SoFi Invest investment app today.

See how SoFi margin trading may work for you.

FAQ

What is a margin call?

A margin call occurs when the investor does not keep the minimum amount in their margin account. If the account balance falls below the minimum amount, the broker typically will ask the account owner to deposit more funds, or assets, in the account to meet the minimum requirement.

What is a margin rate?

A margin rate is the interest rate that applies when an investor trade on margin. Margin rates can vary from broker to broker. Many brokerages use a tiered rate schedule based on the amount of the margin loan.

How popular is margin trading?

Margin trading as an investment strategy is not particularly popular; but neither is it unpopular. It’s just risky. Because of the potential risks involved, professional traders tend to use it more than individual investors. And it is generally not recommended for beginners.

What happens if you don’t have the money to meet a margin call?

If you get a margin call, it is your responsibility to deposit more funds into your account. If you don’t meet the margin call after a number of warnings from your broker, then the broker has the right to sell all or some of the current positions to bring the account back up to minimum value.

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*Borrow at 2.5% through 5/31/22 and 5% starting 6/1/22. Utilizing a margin loan is generally considered more appropriate for experienced investors as there are additional costs and risks associated. It is possible to lose more than your initial investment when using margin. Please see SoFi.com/wealth/assets/documents/brokerage-margin-disclosure-statement.pdf for detailed disclosure information.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
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