Common questions about Schwab Bank's Pledged Asset Line

Call 888-725-3630 to speak with a Regional Banking Manager about a Pledged Asset Line or log in to get started.

Account details

Schwab Bank's Pledged Asset Line is an uncommitted, revolving non-purpose flexible line of credit¹ secured by assets held in a separate Pledged Account maintained by Charles Schwab & Co., Inc. ("Schwab").

All loan requests are accepted or rejected in Schwab Bank's sole discretion.

Proceeds must be used for a lawful personal, commercial, or business purpose under state, federal, or other applicable law and may not be used to purchase securities, pay down margin loans, or be deposited into any brokerage account.

Individuals (borrowing either individually or jointly) and revocable living trusts are eligible.

There is no stated maturity date.

At any time, Schwab Bank may demand immediate payment of all or any portion of the outstanding obligations or require additional cash or securities to be added to the Pledged Account.

Interest rates are based on the market-driven Secured Overnight Financing Rate ("SOFR") plus an interest rate spread. The interest rate spread is determined based on the loan value of your collateral at the time the line of credit is opened.

Changes in the index rate may cause your monthly payments to change and may increase your cost of borrowing. Schwab Bank reserves the right to change any part of the interest rate after the PAL is established, including the index rate, interest rate spread, or post-demand spread.

There are no fees to apply for the line of credit, and there are no account opening or maintenance fees on the Pledged Account (brokerage commissions and other fees may apply).

The only fee associated with your line of credit is a late payment fee of $25.

Schwab Bank does not provide investment advice with respect to the Pledged Account, any securities held in the Pledged Account, or any transactions therein. Unless otherwise specified or agreed, Schwab Bank also does not make recommendations about the Pledged Account, assets held in the Pledged Account, or any transactions in the Pledged Account.

Entering into a Pledged Asset Line and pledging securities as collateral involve a high degree of risk. At any time, including in the event that the loan value of collateral is insufficient to satisfy the minimum loan value of collateral or to support the outstanding loans, Schwab Bank may demand immediate payment of all or any portion of the outstanding obligations or require additional cash or securities to be added to the Pledged Account maintained at Schwab.

If a demand is not addressed, the pledged securities may be immediately liquidated without further notice to you, which may result in tax consequences.

Account requirements

Schwab Bank requires that the assets pledged as collateral be held in a separate Pledged Account maintained at Schwab, and that, at all times, the loan value of collateral of the assets held in the Pledged Account(s) be equal to or exceed the greater of (i) the minimum loan value of collateral (currently $100,000) and (ii) the outstanding loans. 

Schwab Bank, in its sole discretion, will determine what collateral is eligible collateral and the loan value of collateral.

The first advance made against a Pledged Asset Line must meet or exceed the minimum initial advance amount (currently $70,000). After the minimum initial advance has been satisfied, subsequent advances can be made in lesser amounts subject to available credit.

The Pledged Account is a special brokerage account set up at Schwab, a broker-dealer and an affiliate of Schwab Bank. This account holds your assets that have been pledged as collateral for the line of credit. There are no account opening or maintenance fees (brokerage commissions and other fees may apply). 

The following limitations are established on the Pledged Account:

  • No margin capability
     
  • No option trading
     
  • No payment features, including check writing, debit card, or bill pay privileges
     
  • Only assets constituting Eligible Collateral may be acquired
     
  • Settlement terms require cash in advance

During the application process, you determine the securities and cash positions that will be pledged for your line of credit. Once your application is approved, you will have authorized Schwab Bank to move eligible assets you are pledging as collateral from your Schwab brokerage account to your Pledged Account (which is the brokerage account you are required to pledge to Schwab Bank).

Account servicing

Log in to Schwab.com and visit the Accounts Summary page. The balance of your Pledged Asset Line is visible there. For more detail, click on 'Pledged Asset Line.' This information is also available on the Schwab Mobile app.

Log in to Schwab.com and visit the Accounts Summary page. Click on 'Pledged Asset Line.' You will then see the balances of any outstanding loans, available credit, and total credit line as well as additional details on the interest rate. This information is also available on the Schwab Mobile app.

To view your monthly minimum payment online, log in to Schwab.com and visit the Accounts Balances page. Select your Pledged Asset Line account from the drop-down (if you have more than one line, all lines will be displayed). Scroll down to the Balance Details section.

The payment due can be found under the 'Payment Activity' section. This information is also available on the Schwab Mobile app.

Log in to Schwab.com and visit the Accounts Balances page. Select your Pledged Asset Line account from the drop-down (if you have more than one line, all lines will be displayed). Scroll down to the Balance Details section.

You will see your payment history under the 'Payment Activity' section. Alternatively, payment transactions can be viewed in the History section in the top navigation. This information is also available on the Schwab Mobile app.

Limited payment history is available on the Balances page and full payment history is on the Transactions page.

Pledged Asset Line payments are due on the 15th of every month, and you can make a payment using one of four methods:

  • Online transfer: Transfer funds online from your Schwab Brokerage or Schwab Bank accounts on the Transfers & Payments page on Schwab.com or the Schwab Mobile app, or call us for help.
     
  • Schedule a recurring automatic payment: To schedule an automatic payment from an outside institution, please submit a completed Automatic Payment Authorization Form or call us for help.
     
  • By check: Simply mail your check and the payment coupon that comes with your monthly statement.
     
  • By wire: You can arrange a wire transfer with your outside financial institution directly to your Pledged Asset Line (subject to terms and conditions of your outside financial institution).

No, you can generally make an initial advance at any time, assuming the loan value of the collateral in your Pledged Account has not fallen below the minimum loan value of collateral (currently $100,000). Please note that loan requests made on the Pledged Asset Line are accepted or rejected in Schwab Bank's sole discretion.

After your Pledged Asset Line has been opened, your loan value of collateral must meet or exceed the greater of (i) your outstanding loans or (ii) a minimum loan value of collateral established by Schwab Bank (currently $100,000). You can use tools on Schwab.com to obtain information about your Pledged Asset Line and Pledged Account, including the loan value of collateral of the assets held in your Pledged Account and the advance rates used to determine such loan value. By using the Advance Rate Lookup tool on Schwab.com, you can also obtain information about the potential eligibility and advance rates associated with specific securities.

At any time, including if the loan value of collateral is insufficient to satisfy the minimum loan value of collateral or to support the outstanding loans, Schwab Bank may demand immediate payment of all or any portion of the outstanding obligations or require additional cash or securities be added to the Pledged Account.

Log in to Schwab.com and visit the Accounts Balances page. Select your Pledged Asset Line account from the drop-down (if you have more than one line, all lines will be displayed). Scroll down to the Balance Details section.

You will see your Total Collateral, Total Eligible Collateral and Excess Collateral under the 'Pledged Collateral' section. This information is also available on the Schwab Mobile app.

If you have insufficient collateral in your Pledged Account, we recommend transferring sufficient funds or eligible collateral into your Schwab Pledged Account(s) by logging into Schwab.com and visiting the Transfers & Payments page. Alternative methods to deposit cash into your Schwab Pledged Account(s) include wire transfer or Mobile app deposit.

Other options to resolve this matter may be available. Please call the Schwab Bank Lending Solutions team at 800-838-6573 if you have questions or need assistance with adding cash or collateral to your Schwab Pledged Account(s).

Accessing funds

You can access your funds once your Pledged Asset Line application has been approved and pledged collateral has been moved to the Pledged Account. You will receive an approval letter and welcome email from Schwab Bank.

You can access your new Pledged Asset Line in the following ways:

Log in to Schwab.com and click 'Move Money,' then 'Recent Transfer Activity' to see the status of your 'Recent or pending transfer.' This information is also available on the Schwab Mobile app.

Want to learn more about a Pledged Asset Line?

Speak with a Regional Banking Manager at 888-725-3630 or talk to your personal Schwab Financial Professional.

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