Margin Loans from Schwab

Access the funds you need while maintaining your investing goals. 

Put your portfolio to work.

Margin lending from Schwab is a flexible line of credit that allows you to borrow against the securities you already hold in your brokerage account.

When used correctly, margin loans can help you execute investment strategies by increasing your borrowing power to purchase more securities. It can also serve as a source of flexible borrowing for other short-term financial needs.

Schwab offers competitive rates and a flexible repayment schedule.

Margin Lending

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Margin is a flexible lending solution available to Schwab clients looking to purchase additional securities, or meet short-term borrowing needs. Margin is a feature that may be available on your brokerage account and if it is, you can start to borrow with as little as $2,000 in eligible securities at competitive interest rates. If not, then it's easy to apply.

So what is a margin loan? 

Margin works by allowing you to borrow against the eligible investments you already hold in your brokerage account, generally up to 50% of the value of those investments.

Similar to how a mortgage loan involves using the house as collateral, with a margin loan, Schwab would use your investments as collateral.

How can you use a margin loan? 

Margin loans can be used in a variety of ways. They can increase your purchasing power, as well as your trading flexibility, allowing you to act on market opportunities when you don't have enough cash on hand. 

But margin loans aren't just used for trading and investing. They can also be used for short-term personal or business needs, including unexpected medical bills, paying a tax bill, home or auto repairs, or other unanticipated short-term financial needs. 

Margin loans come with their own benefits and risks. 

Borrowing on margin can provide a number of advantages other borrowing solutions don't—like quick access to cash without having to sell your investments.

Margin loans can also be a cost-effective way to access cash or liquidity, often with interest rates lower than those for credit cards or unsecured loans.

There are potential tax benefits with margin. When you take out a margin loan without liquidating the securities in your portfolio, you may be able to defer capital gains taxes, or possibly deduct the interest against your net investment income. Be sure to consult your tax advisor about your specific financial situation.

Margin loans also have no repayment schedule as long as you maintain what is known as the margin minimum requirement, so you can pay at your own pace. 

There are risks associated with margin and it is possible to trigger a margin call if your account does not meet the minimum requirement and the value of your securities drop. 

If a margin call happens, you will want to deposit more cash or marginable securities into your account to meet the requirement. However, please note that Schwab will be allowed to sell securities without your prior approval in order to meet the margin minimum requirement. Make sure you understand the risks of using margin before obtaining a margin loan.

There are a number of things you can do to decrease the risk of a margin call: 

•    Keep your portfolio diversified. 
•    Borrow less than the maximum amount allowed, and consider setting your own personal maintenance level, above which you won't borrow. 
•    And monitor your portfolio often, especially since market fluctuations can reduce the value of your securities and increase the outstanding loan-to-collateral ratio in your account.

If you are interested in a margin loan and how it might be able to help you along your financial journey, call 1-877-752-9749 to speak with a Schwab Investment Specialist, or visit slash margin for more details. 


Margin borrowing is not appropriate for every investor. Make sure you understand the benefits and risks.

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How do margin loans work?

Margin lending can increase your profits as well as your losses, so it is important to determine how and if it fits into your investment strategy. Margin accounts also require a higher level of attention, including potentially monitoring stock prices on a daily basis. To better understand, let's take a look at a hypothetical example showing both gain and loss scenarios, with and without margin lending. (For simplicity, we've excluded trading fees and taxes.)

Margin and loss tables

  • A gain with margin

    You pay cash for 100 shares of a $50 stock. -$5,000
    You buy 100 more shares on margin.   $0
    Your stock rises to $70, and you sell 200 shares. +$14,000
    You repay your margin loan. -$5,000
    You pay margin interest.* -$400
    Your gain
  • A loss with margin

    You pay cash for 100 shares of a $50 stock. -$5,000
    You buy another 100 shares on margin.  $0
    Your stock falls to $30, and then you sell 200 shares.  $6,000
    You repay your margin loan. -$5,000
    You pay margin interest.* -$400
    Your loss -$4,400

A gain without a margin/ a loss without a margin tables

  • A gain without a margin

    You pay cash for 100 shares of a $50 stock. -$5,000
    Your stock rises to $70, and you sell 100 shares.  $7,000
    Your gain  $2,000
  • A loss without margin

    You pay cash for 100 shares of a $50 stock. -$5,000
    Your stock falls to $30, and you sell 100 shares.  $3,000
    Your loss -$2,000

Disclosure information

*Example uses a hypothetical, simple interest rate calculation at a rate of 8.00%. Actual interest would be higher due to daily compounding that is charged monthly to the account. The example assumes the loan amount remains constant and is outstanding for 12 months. Commissions, where applicable, and taxes have not been included in these illustrations but affect final outcomes and should always be considered.

How can I start using my margin loan?

Once your Schwab brokerage account is approved for margin use, you can tap into your available funds simply by:

  • Placing a trade

  • Writing a Schwab One® check

  • Placing a wire transfer

  • Requesting a check

  • Using your Schwab One Visa® Platinum debit card

Your interest rate depends on your balance and Schwab’s base rate. Interest accrues daily and is posted monthly.

Before you begin using margin, you should read Schwab's Margin Borrowing Overview and Disclosure Statement.

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