Line of Credit
Use your Line of Credit for a wide range of needs
Home purchase or renovations
Tax payments
Business opportunities
Major purchases
(e.g. cars, travel)
Debt consolidation
Education expenses
Benefits of Line of Credit
Access cash without selling securities
If approved, use your eligible E*TRADE from Morgan Stanley accounts as collateral while keeping your investment strategy intact.
Apply without impacting credit score
Unlike other forms of financing, applying for a Line of Credit will not impact your credit score.
Borrow what you need, when you need it
Access funds up to your approved amount, online or via wire, with funds typically available within 2 business days.2
Pay interest only on the amount you borrow
There are no fees charged to open a Line of Credit; you will only be charged interest on your outstanding balance.
Take advantage of competitive interest rates
May offer you a lower rate than other forms of debt, such as home equity loans, credit cards, or personal loans.
Choose from flexible repayment options
Opt to pay interest only, principal and interest, or defer payments with interest rolled into the principal balance.7
Access cash at competitive interest rates
| Your Maximum Eligible Credit Line | Variable APR4 |
|---|---|
| $10,000,000+ | 6.811% (Index* + 2.25%) |
| $5,000,000 - $9,999,999 | 7.064% (Index* + 2.50%) |
| $2,500,000 - $4,999,999 | 7.318% (Index* + 2.75%) |
| $1,000,000 - $2,499,999 | 7.571% (Index* + 3.00%) |
| $500,000 - $999,999 | 8.078% (Index* + 3.50%) |
| $65,000 - $499,999 | 8.585% (Index* + 4.00%) |
| < $65,000 | 9.852% (Index* + 5.25%) |
How to calculate the index:
The Line of Credit uses a Variable Rate Adjustment that has been selected or recommended by the International Swaps and Derivatives Association Inc. (ISDA). The previous Variable Rate Adjustment, increased quarterly on or about the dates below until July of 2023 by approximately equal increments to a maximum of 0.11448%.
Revised Variable Rate Adjustments
| Date | SOFR Rate Index | Variable Rate Adjustment |
|---|---|---|
| 7/10/2023 | 30-day average SOFR plus | 0.11448% |
Watch a video to learn more about Line of Credit
Get started today
Applying for a Line of Credit account is easy and only takes minutes. Once approved, cash can be deposited into your designated bank account within two business days.
Line of Credit FAQs
What are the risks of a Line of Credit?
Securities-based lending involves special risks and is not appropriate for everyone. Be sure to carefully review product details, risks, and benefits to ensure this product is right for you.
- A decline in the value of your pledged collateral may require you to provide additional funds or securities to avoid a maintenance call.
- You can lose more funds than are held in the collateral account. A Line of Credit account is a full-recourse loan and you will be held liable for any deficiency.
- Morgan Stanley Private Bank can force the liquidation of any securities pledged as collateral, and can do so without contacting you first. You are not entitled to choose which securities in the collateral account are liquidated.
- Morgan Stanley Private Bank can modify its collateral maintenance requirements at any time, without notice to you.
- You are not entitled to an extension of time to resolve a maintenance call.
- If your assets are liquidated, there may be adverse tax or other consequences.
- A Line of Credit is an uncommitted demand facility, which means the bank may demand full or partial repayment at any time or elect not to advance funds.
How is a Line of Credit different from margin borrowing?
A Line of Credit is different in two ways: (1) the way in which the funds are used, and (2) the interest rates on the Line of Credit.
- How the funds are used:
- For a Line of Credit, funds can be used for any lawful purpose, except for the purchasing, carrying, or trading of margin stock or repayment of a margin loan.
- Margin can be used for any lawful purpose, including the purchasing, carrying, or trading of margin stock.
- Interest rates:
- A Line of Credit is tied to the 30-day rolling compounded average Secured Overnight Financing Rate (SOFR), as published by the Federal Reserve Bank of New York, plus a variable rate adjustment, plus a margin.
- Margin interest rates are typically tied to the E*TRADE Base Rate, which is set at the discretion of E*TRADE with reference to commercially recognized interest rates. Margin interest rates may move with changes in the E*TRADE Base Rate, or with adjustments in the debit balance.
What account types are eligible to be pledged as collateral for a Line of Credit?
Non-retirement and non-stock plan accounts including individual, joint, and revocable trusts with no more than two trustees may be pledged as collateral.
Are there restrictions on my account(s) once pledged as collateral for a Line of Credit?
Yes, there are restrictions on accounts pledged as collateral:
- No margin borrowing. Funds cannot be used for purchase, carrying, trading of margin stock, or repayment of a margin loan.
- No margin and options trading. Upon being approved for a Line of Credit, the collateral account(s) will have margin and options trading capabilities removed (if applicable). Pledged accounts will also be prohibited from enrolling in margin and/or options trading.
- Cash management and payment features disabled. Upon taking a draw from your line of credit, all cash management and payment features will be restricted (e.g., bill pay, check writing, use of debit card, electronic funds transfers, wires).
If you would like to withdraw cash and/or securities from a pledged account, please call us at 800-387-2331 for assistance.
What happens if market fluctuations lead to a decline in collateral account value?
In this situation, you may be required to deposit additional cash or securities as collateral to maintain your original collateral amount. Failure to do so may result in the selling of some or all of your pledged securities, which may result in adverse tax consequences.