Month: February 2020

Investors can use a diversified portfolio as collateral for loans. Certain investors, usually those with considerable wealth and experience, have almost access to credit through a practice known as securities lending.

Whether through a private bank or other financial institution, loans and credit lines backed by securities can be especially useful for those who occasionally make large purchases, such as buying real estate or buying private operating companies.

This is different from lending to securities, whereby a broker lends securities to traders for the short sale of those shares or other assets. Securities-backed loans, also known as securities-based lending, instead of using securities as collateral to secure investor loans.

What is a Securities Loan?


A securities-backed loan is a debt secured by a portfolio of investors for qualifying securities such as stocks and bonds. The borrower deposits securities into an account where the lender has a lien, and the lender will often provide funds for a loan of 50 to 95 percent of the market value of the securities.

The exact amount depends on the specific underlying assets in the portfolio and the level of diversification. For example, a lender may approve more funds relative to a portfolio of U.S. Treasury bills than a portfolio that has one concentrated stock.

The lending process in action


When a borrower wants access to credit funds, he or she writes a check against the credit line or submits payment instructions to the bank account.

As the value of the underlying collateral changes, the credit capacity of the account fluctuates, which may result in the deposit of additional collateral in the form of cash or the deposit of other stocks and bonds not previously included in the collateral.

The borrower may also repay some or all of the outstanding loans. Unless executed within a certain period of time known as a “hardening period”, which may range from two days to 30 days, the lender will liquidate the securities acting as collateral through the sale.

Qualified borrowers may include individuals, joint investors and revocable life trusts in which the trustee, creditor, and beneficiary are identical. Depending on the financial institution, loans can range from USD 100,000 to USD 5,000,000 or maybe more for high net worth individuals. These loans have terms that are tailored to the short- and medium-term borrowers; five years is common.

Use for investors

Securities backed loans have several advantages. They can offer the borrower significantly lower interest rates and reduce risk over alternatives such as margin loans, although they still carry a higher risk than other forms of lending.

In addition, they offer greater repayment flexibility and provide a defrosting period to meet additional security requirements. This is different from the requirement for an immediate loan payment.

The interest rate on a securities-backed loan is often based on a premium over the Good Finance Investment Corporation (GFIC).

This range varies, but, typically, the higher the value of the investor portfolio, the lower the interest rate. In certain cases, the lender may lower the interest rate on the loan under the supervision of the securities if it is allowed to pledge a “precautionary” lien on the real estate or property of the investor. This may also allow the investor to deduct interest on her tax return. Some securities backed by securities also offer a special interest payment.

Risky securities lending business


Despite their benefits, securities backed by securities come with some risks. Even a stable company with historical stock price stability can succumb to the difficult economic environment and see its stock price fall.

When the capital market and fixed income perform poorly, which typically happens in cycles, the market value of many assets may hit levels that were previously unimaginable.

Unless the lender has a lot of excess liquidity outside the securities that support the loan, or the securities that support the loan make almost entirely assets such as short-term US Treasury bills, this can cause the bank to call on the investor loan.

This could cause forcible liquidation of lenders at unattractive prices. The borrower now had the ability to buy and take it from him, and he had no choice to wait for the market to recover.

Another danger of a securities backed loan is that the lender no longer feels comfortable with some security that serves as collateral. For example, imagine that you own a large block of stock in what used to be a well-respected company, such as Good Finance.

As digital cameras eroded the company’s profits, the bank may have decided that it would no longer accept Good Finance as collateral.

You would either need to sell your Good Finance stock and invest in something that is acceptable to the lender’s needs, or you would need to contribute additional capital to a secured account held by your collateral to avoid a credit line reduced or canceled. In order to mitigate other types of risks, securities backed by securities also have a significant limitation:

The borrower cannot use the money to pay off margin or invest in other securities.


The balance sheet does not provide tax, investment or financial services and advice. The information is presented regardless of the investment goals, risk tolerance or financial circumstances of any particular investor and may not be suitable for all investors.

Past performance is not indicative of future results. Investing involves risk including the possible loss of equity.

An invoice credit (RAL) is a loan that many tax entrepreneurs provide to people against their income tax. A tax refund credit prediction loan can be approved in minutes and cash available within a day or two.

These loans are based on the full tax refund amount. Credits can be obtained for the full or partial amount of the expected return. When the check arrives at the tax office, the loan is paid in full, with interest, and the remaining balance is issued to the recipient.

Many people use this program because of their quick access to money despite the high-interest rate.

Although there are no credit checks to receive these loans in a conventional manner, loan preparation must require information from the GFI to determine if there is any lien on the repayment.

Beneficiaries can be charged against tax refunds, student loan arrears, and child support. If the lien is against the refund, the reimbursement credit for the reimbursement can be deducted or just given for the refund condition.

Why RAL loans are not consumer-friendly


People thinking of a predicted tax credit should try to avoid the program. RAL loans have very high fees for services and interest. Because these loans are short-term financing, they are not governed by the same interest laws as conventional loans. Like a payday loan, a RAL loan has interest rates in excess of 200% APR.

For example, a payday loan could actually cost a couple of hundred dollars to borrow a few thousand in 5 days.

Better taxation of taxes


Electronic tax filing can give you a refund within two weeks. If you have a bank account, you can have the money deposited automatically for even a shorter period of time.

The need for these loans is no longer needed. Consumers who want to receive money faster than two weeks may want to consider a different financial option to avoid these high-interest rates.

If you don’t have a bank account, you might consider buying a prepaid debit card. Most of these cards can function as a bank account and can receive electronic deposits.

Sign up for a card that has routing numbers available and you will use the same purpose in receiving your refund. These online banks are very useful for people who have had credit problems in the past. Once the money has been sent to your card, you can access it immediately.

News from the GFI on payday loans

The GFI issued a statement saying it would no longer provide consumer information to refund processing companies. This tax information is crucial to their ability to provide RAL credit.

The GFI has stated that by providing this service to these companies, they are violating the privacy of taxpayers to secure profits for these private companies.

The GFI further explained that the onset of free preparation through their site, the electronic filing and the speed with which these refunds are processed should eliminate the need for such loans.

In 2009, consumers spent nearly USD 750 million in fees for these types of loans. An incredible amount for just 8 million credits to process. That’s an average of USD 950 per membership fee per person on a loan that generally only lasts a week or two.

The largest providers of these loans, Good Finance and Good Credit are armed, stating that disruption to these types of services is burdensome to taxpayers who need quick access to their repayments.

As of this moment, there is no indication of whether lenders will find a new way to offer this type of service in the coming tax seasons.

Basic loan payment calculators are just one of the endless types of free online calculators that can help you analyze your real estate transaction. You will find calculators to help you determine your debt-to-income ratio, loan and tax cost calculators, tax and investment calculators, and more.

Credit qualification calculators

Credit qualification calculators

Online payment calculators give you the ability to analyze slightly different changes to your payment scenario. They help you determine what combination of elements must be put together to get the best home loan. Mortgage Loan Calculator is fast and easy to use. Just include the loan amount, loan length and interest rate to calculate your monthly payment.

You can view a depreciation schedule that allows you to see how much each payment is applied to principal and interest. Scroll down to find another calculator that shows you results before paying off your loan. offers a What’s Missing calculator. For example, if you know the payday, term and loan amount, it calculates the interest rate. If you know the loan amount, term and interest rate, it calculates the payment.

Credit comparison calculators

Credit comparison calculators

Loan comparison calculators allow you to compare many aspects of two or more different home loans.

Loan calculator offers a calculator that lets you look at a 30- and 15-year mortgage.

The mortgage professor’s fixed mortgage ARM calculator helps you decide which of these two types of loans is best for your needs.

Refinancing and home equity calculators

Refinancing and home equity calculators

This Debt Consolidation Calculator helps you determine if you should consolidate your debt with a home equity loan or other mortgage. It also calculates how many months it will take to break even at the closing cost.

More calculators

Other useful categories of mortgage calculators:

Disbursement calculators show how an extra payment will affect your credit.

Taxes and Investments Calculators help you determine capital gains for sale, analyze cash flow and net worth of an investment property purchase, or simply find out how much you save on taxes when you own a home.

PMIs and accurate calculators help you determine if it’s best to save for a bigger drop before you buy a home, or go with less down and buy private mortgage insurance (PMI). You will also find calculators associated with the purchase of points to reduce the interest rate.

You have thousands and thousands of calculators online to help you sell or buy a home. Take some time to explore them.

Subsidized loans for retirees

Subsidized loans for retirees

In addition to taking care of public administration pensions, the Social Institute Public Employees Management provides credit lines at advantageous interest rates. These are the so-called and Government Agency loans, which allow access to even large sums which public pensioners can also access. So let’s see who they are and how to get Social Institute loans to retirees.

Who can get the loans

Who can get the loans

Social Institute retirees and Government Agency can apply for subsidized loans on condition that they meet the required requirements. Loans are divided into two categories: small loans and multi-year loans. To obtain the small loans, it is sufficient to be registered in the Unitary Management of credit and social benefits, this is the Credit Fund through which Social Institute disburses the former Government Agency loans.

For long-term loans, on the other hand, it is necessary not only to be enrolled in the unitary management, but also to be able to have at least 4 years of service life useful for the pension and a minimum of 4 years of contributions paid to the aforementioned management.

Loan amounts and repayment

Loan amounts and repayment

As regards the contractual conditions, Social Institute loans to pensioners are repaid with an amortization plan in monthly installments, directly deducted from the applicant’s pension. As for the contractual conditions, however, these vary according to the type of loan.

For small loans the duration can be annual, biennial, three-year or four-year . The maximum amount that can be financed varies according to the duration of the loan: in fact, for each year it is possible to obtain two average net monthly payments received by the applicant.

For example, a pensioner who receives a pension benefit of 1000 USD each month may apply for a small annual loan for a maximum amount of 2000 USD. The interest rate for small Social Institute loans to pensioners is always 4.25%.

The issue for multi-year loans is different, however, which allow access to sums of up to $ 150 thousand. The duration can be of 5 or 10 years, while the amount that can be financed varies according to the reason for which the loan is requested. The rate is 3.5%.

How to apply for a loan

How to apply for a loan

For both small and multi-year loans, the loan application must be submitted electronically. The application forms are available directly on the official Social Institute website, in the Forms section (path: “Home – Services and Services – All modules – Management of Public Employees – Registered / Retired – Credit and social benefits”).

As for sending the application, this must be sent electronically. Public employees must contact the Administration they belong to while public pensioners can use the special online service or contact the Social Institute Contact Center.

Loan simulation

We also remind you that on the official Social Institute website there is a service that allows you to perform online simulations. To reach it, it is necessary to follow the path: “Home – Services and Services – Management of public employees: simulation of calculation of small loans and multi-year loans”.

The web application offers three calculation methods :

  • loan simulation;
  • loan simulation for specific amount;
  • loan simulation for ideal installment.

Once the desired simulation mode has been chosen, all the required data must be entered in the appropriate form. To perform the simulation, simply click on the “Simulate” button.