Stock loans are an excellent alternative to margin accounts. It allows investors to use stocks as collateral for loans, which can then be used to trade. The interest rate on stock loans is usually lower than rates for margin accounts, and the borrower doesn't have to pay any commissions.
One of the most attractive characteristics of stock loans, however, is that they are generally non-recourse, meaning that in the event the stock value decreases, the lender cannot force the borrower to sell the shares or any other assets. As a result, stock loans are becoming increasingly popular among high-net-worth individuals.