The processing times are also very short, so that a payment usually takes place on the same day. You have to transfer money to your account yourself. Borrow money from the warehouse. Economy. The money can not only be used to acquire other securities, but also to increase the financial scope – for example, to purchase a vehicle or a television.
This money can also be used to purchase securities
The big plus: Securities lending is cheaper than a bank overdraft. If the stock falls, the borrower has to top up money for other reasons. For whom is a securities loan available?
In principle, anyone who has a custody account can purchase a security loan, which is also called a securities loan. How can I borrow a security loan? Similar to bank overdrafts, the deposit statement works: this means that the depository contacts its house bank and a security loan on its custody. Then the house bank grants the loan.
The depositor now has flexible access to the money
He can use part of the money, the full amount or nothing at all. Do I have to borrow from the house bank where my deposit is? “Because the Securities Loan is a pledge of the deposit, it would be conceivable, in principle, to obtain such a loan from a bank other than the custodian,” says Jaren shortly. Press officer of the GSM in D?
“The smaller the default risk, the higher the value of mortgage lending,” explains Kurt. The credit institutions themselves determine the sum of the individual mortgage lending values. The higher the risk type, the more likely it is that price losses will occur. “The larger the portfolio, the greater the underlying mortgage lending value and the lower the interest rate, the greater the credit line can be,” says Karylle.
How is a security loan repaid?
When the repayment of the loan is made, the depot owner can determine himself. The interest is usually calculated on a quarterly basis. What about my balance when stock prices go down? “If the market value of the loaned securities falls below the mortgage lending value, in practice there is the risk of a rate hike,” says GSM spokesman Kurt. If that were not enough, the consumer would have to replenish the money.
If this is not possible, BayernLB normally has the right to sell shares. Therefore, he advises the house bank to check before accepting a security loan, as it will behave in case of price losses.