How to Get a Brokerage Account Loan

• Step 1

  Apply to add a margin account in your existing brokerage account. Call or visit your brokerage to get the forms needed for applying. Retirement brokerage accounts cannot have margin features added.

• Step 2

  Put enough securities into your account to meet the minimum account equity required for a margin account. The information you received during the margin account application lists these minimum requirements. In most cases, the minimum equity required to use a margin account is 50 percent of the account's value or $2000, whichever is higher. At some brokerages, these figures may be higher.

• Step 3

  Look at your current brokerage account information and look for a figure called "Amount available for withdrawal " or something similar. That will tell you how much you're able to withdraw from your account while meeting your brokerage house's minimum margin rules. For example, if you have $10,000 worth of securities in your account, you can borrow 50 percent of that (or $5000) and still meet the 50 percent minimum for margin accounts.

• Step 4

  Look at your current brokerage account information for a figure called "buying power" or something similar. That is the maximum value of securities you can buy. For example, if you have $10,000 cash in your account, you can buy $20,000 worth of securities since you'll have minimum 50 percent equity (or $10,000) in your $20,000 worth of securities.

• Step 5

  Withdraw cash from your account as you normally do by buying a security or writing a check. You do not need to inform the brokerage you're using a margin to withdraw the cash. Your margin account loan is automatically open when a transaction is done without enough cash in your brokerage account to cover the transaction.

• Step 6

  Look at your current brokerage account information for a figure called "margin maintenance requirement" or something similar. This is the minimum amount of equity allowed by your brokerage. This number ranges from 25 to 50 percent depending on the brokerage and the securities in your account.

• Step 7

  If you get a margin call from your brokerage due to insufficient equity in your margin account, raise equity in your brokerage account by selling securities or by depositing more cash or securities into your account. The amount required is listed in your margin call. A margin call is delivered by your brokerage via email, phone, or mail.

• 1
• Your margin equity ownership changes daily due to market fluctuations. It is your responsibility to make sure you have enough equity in your margin account to avoid a margin call or forced sale of your securities.
• Your margin equity ownership changes daily due to market fluctuations. It is your responsibility to make sure you have enough equity in your margin account to avoid a margin call or forced sale of your securities.

References & Resources

• TD Ameritrade Margin Handbook
• Charles Schwab Margin Information
• "USA Today" Article on Margin Loans