PAL
Proficient Auto Logistics, Inc. Common Stock
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Here’s Schwab’s loan rates for [Pledged Asset Lines](https://www.schwab.com/pledged-asset-line/rates) and here are their [margin loan rates.](https://www.schwab.com/margin/margin-rates-and-requirements)
You can see that not only are the PAL rates lower, they’re calculated differently, based on the total size of your collateral rather than the size of the loan you take against it.

So what’s the advantage of a SBLOC/PAL over margin?
I can take out a margin loan and use for whatever *plus* for buying more securities (if I wanted to, which I don’t). Plus no extra paperwork.
Does the SBLOC/PAL have better rates? A higher allowed LTV?

Generally a good idea on a cash offer IMO would be to specify cash with no financing contingency but you still withhold the right to use a preferred lender if you choose. Then, you can apply for a mortgage in parallel with using a LOC (that you’ve already set up) to meet funding for closing. The LOC would function as a backup to the mortgage if that fell through.
Anyway, if that’s not how the contract is structured I don’t think it’s *dumb* per se to use a LOC for a longer term purpose. It just changes the risk characteristics of using leverage to purchase a home quite a bit. Typically a LOC would be for a shorter term practice as the variable rate and variable margin requirements can make the situation untenable quickly.
If you have a large enough bond and/or dividend portion of your portfolio then this can help pay for meeting the interest on the line of credit until that balance is satisfied. And can help keep assets invested.
If you can pay down your SBLOC / PAL balance to an amount that allows bond interest / dividends to make payments and the total amount is less than about 10-20% of total assets then that would restore a lot of safety in the loan structure.
Otherwise, the broker could force you to sell at the worst possible time to cover a margin call… compared to forced sell at a market bottom it *would* be better to sell now to make the cash funding possible if you want to think of it that way.

MHMMM, THANK YOU AGAIN FOR THE DELICIOUS DIP, KENNY!! WE GOT YA JUST WHERE WE WANT YA, PAL!!

yep, they'll get to that step, recoil that they're being quoted 3-5% higher rates on the cash out refi mortgage, and will get cold feet about that and keep the SBLOC/PAL. Not a great position to start from.

I basically started in 2021 with home equity loan, then later just PAL (Pledged Asset Line) and personal loans at relatively low interests from then until earlier this year. Did pretty well. Mostly all-in into VWRA.
I shared my current portfolio progress (the GP post) and my previous journey with leverage here if you’re interested: https://www.reddit.com/r/singaporefi/s/s40WLpVVdn

It’s technically not quite the same thing as margin, but it fits the spirit of your question. Once you hit a six figure or larger taxable portfolio you can set up a sizable securities based line of credit (SBLOC), also called a pledged asset line (PAL) at Schwab. The interest is variable, a function reference rate and an increment that gets smaller the more money you have, but it’s not crazy high.
In terms of use case, it’s anything where you need to get access to a large amount of money rapidly but usually not keep the loan too long. E.g. if you want to make a strong offer on a house purchase you can use it to ensure that you don’t need to include a home sale contingency (since the loan can bridge the time until you access your home equity). With a large enough portfolio you can even make a cash offer and get a mortgage later.
What it’s not good for is long term mortgage replacement since the rate is variable and you can probably get an ARM at a lower rate. But it beats out a Home Equity Line of Credit (HELOC) in both speed and cost of setup.

Technically but you can get PAL from your brokerage and buy a house with the appreciated stock value :)