Giving Credit Where Credit’s Due
The dream house. The dream wedding. The dream kitchen. The dream vacation. All too often pursuing these dreams is a total nightmare. Why? Because the typical options available for getting the money you need to make these dreams a reality aren’t that great.
The dream house. The dream wedding. The dream kitchen. The dream vacation.
All too often pursuing these dreams is a total nightmare.
Why? Because the typical options available for getting the money you need to make these dreams a reality aren’t that great. If you own a home you can pursue a home equity line of credit (HELOC), but that process often takes weeks and comes with a ton of paperwork – and there’s no guarantee you’ll actually get the loan. Alternatively, you can take money out of your investment account, but you may have to pay taxes on the withdrawal (not to mention shrinking your nest egg!).
But at Wealthfront we think differently. We want you to have your cake and eat it too.
That’s why today we are excited to launch a new service that is our first foray into personal banking. Introducing Portfolio Line of Credit. We live in a world of “instant delivery,” from taxis to groceries to handymen. So why not add lines of credit to the mix? At Wealthfront we want our clients to be able to borrow what they need, when they need it, directly from their smartphones.
Portfolio Line of Credit establishes a line of credit of up to 30% of your account value for Wealthfront clients with at least $100,000 invested in an individual or joint investment account. The best part? We do this instantly and without the hassle of paperwork — you’re already approved when you open your account! It takes 30 seconds to sign up, and in many cases you get your money in 24 hours.
But there’s more good stuff: we offer this line of credit at interest rates well below traditional alternatives, like HELOCs. How? Because your line of credit is secured by your own investments. In fact, you get an even better interest rate the more you have invested in your Wealthfront account. Oh, and you repay on your own timeline. Interest accrues and is added to your monthly balance, but you pay back the loan when it works for you. How’s that for flexibility?
Source: Bankrate, April 2018 | *In some select cases the interest from a HELOC may be tax-deductible
Our goal at Wealthfront is to keep innovating so that you can live your best life. With Portfolio Line of Credit, you’ll get immediate access to credit that’s less expensive and more convenient, all the while continuing to grow your investment account. How’s that for a win-win?
So dream big. We’ve got your back.
Portfolio Line of Credit is a margin lending product offered exclusively to Wealthfront clients by Wealthfront Brokerage Corporation, Wealthfront’s brokerage subsidiary. As with any financial service, there are numerous factors to consider before using a margin lending product including interest rate risk, margin call risk and liquidation risk.
All investing involves risk, including the loss of your principal investment(s), and past performance does not guarantee future results. Margin lending can add to these risks, and investors should carefully review those risks as part of their overall financial strategy. Diversification strategies do not guarantee a profit or protect against loss in declining markets.
About the author(s)
Andy Rachleff is Wealthfront's co-founder and Chief Executive Officer. He serves as a member of the board of trustees and chairman of the endowment investment committee for University of Pennsylvania and as a member of the faculty at Stanford Graduate School of Business, where he teaches courses on technology entrepreneurship. Prior to Wealthfront, Andy co-founded and was general partner of Benchmark Capital, where he was responsible for investing in a number of successful companies including Equinix, Juniper Networks, and Opsware. He also spent ten years as a general partner with Merrill, Pickard, Anderson & Eyre (MPAE). Andy earned his BS from University of Pennsylvania and his MBA from Stanford Graduate School of Business. View all posts by Andy Rachleff