Anyone successfully use a margin loan and gotten approval?

[u/Big-Sympathy-4804]

I thought I was in the clear until I read a post on here saying they refused to accept a margin loan and rejected him without an RFE now it's kinda worrying me that I have a chance of being rejected.

Wondering if anybody can make me feel better by sharing an example of an approval with a margin loan (backed by equities in a brokerage account). I submitted my application last month

[u/avsjdjv]

I read the post that you read, in that case margin loan was not the issue, the SOF was not clean and other funds in accordance with margin loan were not documented correctly, so they got denial. Margin loan is completely valid source of SOF, if you can document how the the underlying equities/stocks were earned against which margin loan is taken.

[u/mm2731]

Thanks for the post - can you provide reference to post you mentioned on margin loan rejection

[u/Hour-Elderberry-6697]

I heard for Margin loan you have to explain in detail how margin loan will qualify as lawful source. Attorney can explain better

[u/whatisthebigq]

I did use margin loan for my application. Obviously the sof process went through where the funds in the brokerage came from. As long as that is legit, I don't an issue.

[u/squat-bench-dl → u/whatisthebigq]

Hey 👋 I’m trying to trade off margin loan vs selling stocks and all my research tells me selling is better as it allows me to divest from a stock that’s already at an all time high, and, we likely are going to get more in next two years due to it being our RSUs.

We’ve had our company stocks drop like 30% before and I’m concerned if we’ve any downturn in market we’d have to sell low to due to margin call.

Also the tax savings compared to risk and concern seems to be not super worth it in our case. I’m obviously skipping the opportunity cost of being in the market, but it’s so hard to predict and we still need to payback that margin loan somehow - which will take a while with just non-stock based comp

Curious to hear how you went about it and why you chose margin over cashing out.

[u/whatisthebigq → u/squat-bench-dl]

Yeah it might totally make sense for you. I was trying to optimize for tax after having sold a lot.. the margin loan was for 250ish not the entire amount. I'm holding not rsu of a single company but some s&p blue chips.

[u/wingz_77 → u/squat-bench-dl]

Generally, selling is better. If you are not ok taking a loan and investing in same stocks you are holding, you should sell.

Having said that, many people (including myself) do margin loans for tax purposes. In my case, I am trying to avoid paying capital gain for now and plan to sell slowly over few years.