#1
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Getting a loan without collateral
Hello all,
I have about $8,000 saved up. The thing is, I want to take out a $18,000 loan so that my account will be above the $25,000 threshhold, allowing me to make pattern day trades and increase my flexibility. I know exactly what I will be doing with my money once I get the extra money, and I will not be taking stock positions larger than $6,000. I just want to know how I can get that much money loaned to me. I just moved back home so I will be starting up a job, perhaps I can use the job income as collateral, but I believe you have to work for a certain period of time. I was wondering what I need to do to get that loan. The only collateral I do have is my car, which, while valued at $5,000, will probably only offer about $2,500 in collateral. If I don't get the loan I will be forced to remote prop trade, thus paying more in software fees per month than I would interest payments for the loan I want. Thanks in advance for your help. [img]/images/graemlins/cool.gif[/img] |
#2
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Re: Getting a loan without collateral
You can't, and this is a really bad idea. You can't use income as "collateral". Collateral is an asset, earnings are an income stream.
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#3
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Re: Getting a loan without collateral
You can. All depends on how much interest you want to pay. You can go to several banks apply for about 3k loan or so. Or open up your trading account many banks will lend up to 50% on your stock positions and cash. And since most of them only check collateral ever 3 months you will be safe. Plus credit cards you can get loans with them. Now is it a good idea to pay 18% to trade, well that is up to you. But unsecured loans to unemployed (or recently employed) cost a lot of money. I will be surprised if you can get anything lower than 15%, but good luck. Maybe prosper.com is a good idea for you. Plus keep in mind that if you just have 25k and you have a few bad days you may be under the limit. Just a thought.
-Alex |
#4
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Re: Getting a loan without collateral
apply to a bank for a loan to buy stocks/?? huh? i dont think so...not if yo utell them what the money is for. If memory serves (could be wrong here) its basically an illegal scheme to get around margin requirements (set by the feds at 50%....)
Of course he can get 50% at the broker...depending on which stocks he is buying. Borrowing money on credit cards to buy stocks is so beyond retarded its hard to talk about. |
#5
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Re: Getting a loan without collateral
greyfox,
Don't day trade. Throw your 25k into an index fund. |
#6
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Re: Getting a loan without collateral
He didn't ask if it was a good idea to do it, he ask how to do it. And many small community banks will give you loans that a large bank would not. And techinically if it is unsecured you are not getting around the margin requirement since your not margined......
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#7
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Re: Getting a loan without collateral
Banks give business loans, car loans, and home loans. They are unlikely to give a $18,000 personal loan to anyone. They would never give a loan to someone to trade stocks with.
You'll have to try credit cards, they are much more liberal in giving out credit. |
#8
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Re: Getting a loan without collateral
notluck, thanks for being the only helpful person that responded. Never heard of prosper.com, I will definitely look into it in the future.
To everyone else, I don't care what you think about daytrading (that's not the issue). I don't care if you like kellogg's corn flakes or fruit loops for breakfast either. I don't plan on trading any of the money loaned out to me (just my equity), I just need the flexibility of getting in and out and don't want to trade futures. It looks like it will just be easiest for me to start the prop account, I just wanted to consider my options and I don't like the risk of a prop firm going bankrupt and taking my money with them. |
#9
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Re: Getting a loan without collateral
Why not just swing trade? If you hold your positions overnight you don't legally need 25k.
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