Personal loans instead of margin?

[Fru-Gal]

I just found a savings-secured personal loan for 2.5%. That seems to me to be a nice alternative to selling stocks for needed cash (during FIRE) at a loss. The MMM post a year or two ago about margin loans got us all thinking about using that dangerous trick like the billionaires do, but this market makes the downside of that approach clear. Other types of personal loans are available in the 6% range. My holdings are down double digits, so wouldn't this be mathematically superior as a short term approach?

[tawyer]

How do the "savings" need to be held?

May we know what company offers this?

[Fru-Gal]

I was curious to know what savings rates and cd rates were doing given the Fed interest rates going up. That was a product that I saw listed in the personal loans section of my credit union. I think it’s for up to 60 months. In my case it doesn’t make a huge amount of sense because basically I would be taking a loan against the cash that I have set aside to live on. Unless you could take a loan that was some greater multiple of the amount of cash you have saved. I haven’t read any fine print about that.

[ChpBstrd]

I might be interested in exploring the personal loan category if it was scalable. E.g. If there was a way I would accumulate enough credit to borrow $1M at 2.5% fixed, that is definitely worth my time to look into. But if it's an intro offer worth maybe a couple hundred dollars, then it's just another "high yield" savings account incentive. 

[getsorted]

I just found a savings-secured personal loan for 2.5%. That seems to me to be a nice alternative to selling stocks for needed cash (during FIRE) at a loss. The MMM post a year or two ago about margin loans got us all thinking about using that dangerous trick like the billionaires do, but this market makes the downside of that approach clear. Other types of personal loans are available in the 6% range. My holdings are down double digits, so wouldn't this be mathematically superior as a short term approach?

There are definitely environments where that makes sense, as a short-term approach, as long as you trust yourself to pay the debt back. Lots of retirees use HELOCs this way as well, to create liquidity during down markets.