Optimal investments that incorporate securities loan programs yield the highest returns.
If you're thinking about utilizing your own stock portfolio for financial gains, you might be wondering about the associated costs and the most beneficial banks or brokers. This article will enlighten you on that matter.
If you're someone who possesses a well-stocked portfolio, is looking to buy appealing stocks promptly, or is currently cash-strapped, you have multiple options at your disposal. You can sell off stocks, mutual funds, or ETFs to generate the required liquidity or utilize your investment balance by securing a loan on your portfolio. Therefore, it's crucial to take into account the extent to which your investment can be used for buying stocks or serving other purposes when selecting the optimal portfolio.
What factors determine the suitable portfolio selection?
Similar to other loans, the effective interest rate is a significant factor and should be kept as low as feasible. However, the potential loan amount is also of importance. This is initially dependent on the (loan) value of the securities in your portfolio. However, due to stock market fluctuations, brokers and deposit banks are reluctant to consider a full 100% of the securities balance as security for a loan. The credit limit varies significantly among providers based on their evaluation of individual investment assets. The same applies to whether customers are allowed to utilize the borrowed money for different purposes and whether securities loans are reported to Schufa – providers differ in their practices.
Can a cheaper portfolio lead to cheaper loans?
To aid interested investors in making an informed decision, ntv commissioned FMH Financial Consulting to examine the best offers from banks and neobrokers, including securities loans.
Surprisingly, obtaining detailed information from brokers and banks proved challenging. Some chose not to disclose interest rates or other conditions, making it difficult to conduct a comprehensive evaluation.
Despite the obstacles, the Frankfurt-based consultants were able to identify the top performers amidst the willing participants.
Two providers receive top marks overall
Before customers can even access a securities loan, their portfolio must be sufficiently filled with a substantial amount of funds. In consideration of entry fees, the experts at FMH Financial Consulting included these costs in their assessment in addition to loan conditions. The overall view of these costs and the loan terms led to the selection of the top-rated providers.
Key differences emerge in this area. Some providers, such as S Broker of the Sparkasse group, only consider stocks, funds, and ETFs up to 60% of the balance as security. Meanwhile, competitors like Smartbroker set the limit at 75% of the investment balance. Some brokers and deposit banks, such as maxblue or finvesto, even consider some funds as security for up to 90% of the investment amount.
It's fascinating to observe that banks continue to report securities loans to Schufa despite the fluctuating value of stocks. However, the loan is guaranteed by a value far exceeding 100%, making a Schufa entry unnecessary.
Another distinguishing factor is whether the money from the loan is subject to a purpose restriction. Primarily, deposit banks and brokers provide securities loans for the acquisition of new investments. However, an increasing number of providers now allow use for other purposes. The credit check is usually completed digitally within minutes.
In the overall assessment of securities costs and securities lending, only online and neobrokers have received a "very good" rating. These are: finanzen.net zero, Smartbroker, Scalable Capital, flatex, S Broker, and maxblue from Deutsche Bank.
Given the information presented, here are two sentences that contain the words 'Credit institutions' and follow from the text:
- When considering securities loans, it's important to note that the credit limit varies significantly among providers based on their evaluation of individual investment assets, highlighting the role of credit institutions in this process.
- Some banks, like Deutsche Bank with maxblue, allow securities loans to be used for various purposes, demonstrating the flexibility offered by credit institutions in their loan policies.
