Pros Easy to qualify. Loan limits may be determined by the balance of your marginable assets rather than your creditworthiness.  Fast funding. There won't be a big application process once your margin account is open. "If an emergency arises, you can often get money within 72 hours," says Scannell.  Low rates compared to unsecured loans. Because they're secured loans, you may receive a lower interest rate than you would with other common types of credit accounts.  Increase potential returns. Buying investments with borrowed money can increase your overall returns.  Avoid having to sell when markets are down. Long-term investors whose investments aren't performing well, but who need cash, might not want to sell while markets are down. Postpone taxable events. "Borrowing against your investments can help you avoid selling an asset and creating a taxable event," points out Weiss. If you sold your investments for a gain, you may have to pay capital gains taxes on your profits.  Cons Increased risk. There's a risk you won't be able to repay the loan, especially if your investments (or the investments you buy with the loan) drop. You could even wind up losing more than you originally invested.  You may be forced to sell your investments. "If the loan balance exceeds a certain threshold, the custodian can either force an account owner to deposit more funds or sell their investments to cover the loan," warns Weiss. If this happens, you might not have a say in when or which investments are sold.  Interest accrues and rates may change. Interest will continue to accrue on your loan while it's outstanding and the rate may change at any time.  The debt could be sent to collections. If your assets can't cover your debt and you don't repay the loan, it could be sent to collections (which could hurt your credit). You might even be sued and have your wages or bank account garnished.