Schwab PAL minimum loan size?

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tcw
Posts: 25
Joined: Mon May 24, 2021 10:07 pm

Schwab PAL minimum loan size?

Post by tcw »

I’ve been thinking about opening a Schwab Pledged Asset Line. The web site says that the minimum advance is $70k, but there are scenarios I can think of where I wouldn’t need that much. Does anyone here know if you can take the $70k and then immediately pay back, say, $50k of it?
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whodidntante
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Re: Schwab PAL minimum loan size?

Post by whodidntante »

How would they stop you?

But... you could get just the amount you want for 1.1% with no subterfuge from IB if you open the account with the right promotion.
Topic Author
tcw
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Joined: Mon May 24, 2021 10:07 pm

Re: Schwab PAL minimum loan size?

Post by tcw »

whodidntante wrote: Sat Jun 19, 2021 8:51 pm How would they stop you?
I don't know how the PAL at Schwab works, so that's why I'm asking. :D

whodidntante wrote: Sat Jun 19, 2021 8:51 pm But... you could get just the amount you want for 1.1% with no subterfuge from IB if you open the account with the right promotion.
I know that IB has lower rates, but I'd prefer to keep my assets in Schwab for various reasons. I've read that others here have been able to negotiate lower interest rates than the published rates at Schwab -- not as good as IB, but still pretty good.
WillRetire
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Re: Schwab PAL minimum loan size?

Post by WillRetire »

OP: I believe your understanding is correct. Further, I believe the $70K minimum requirement only applies to the initial withdrawal; Subsequent withdrawals can be any amount even if your outstanding loan balance drops below $70K.

Don't know why Schwab has this restriction. Perhaps they want customers to borrow big... at first. But like you say, you can quickly put some or all of it back.

Good question to ask a Schwab Bank PAL salesperson.
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tcw
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Re: Schwab PAL minimum loan size?

Post by tcw »

WillRetire wrote: Sun Jun 20, 2021 8:15 am OP: I believe your understanding is correct. Further, I believe the $70K minimum requirement only applies to the initial withdrawal; Subsequent withdrawals can be any amount even if your outstanding loan balance drops below $70K.

Don't know why Schwab has this restriction. Perhaps they want customers to borrow big... at first. But like you say, you can quickly put some or all of it back.

Good question to ask a Schwab Bank PAL salesperson.
Thanks, I’m planning on talking to someone at Schwab after the weekend. I’m actually not even interested in borrowing anything right now — I just want to set up a PAL so that I’ll have the option to borrow in the future if I want. When I talk to them I’ll be up front about all this.
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tcw
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Joined: Mon May 24, 2021 10:07 pm

Re: Schwab PAL minimum loan size?

Post by tcw »

Update: I talked to someone at Schwab, and they said that you basically can take out the initial $70k loan and the pay it back the next day. Then the pledged asset line would ready for use any time in the future. He didn't seem to think there was anything odd about doing this.
ee22bee
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Re: Schwab PAL minimum loan size?

Post by ee22bee »

tcw wrote: Mon Jun 21, 2021 1:09 pm Update: I talked to someone at Schwab, and they said that you basically can take out the initial $70k loan and the pay it back the next day. Then the pledged asset line would ready for use any time in the future. He didn't seem to think there was anything odd about doing this.
Thanks OP. Good to know. On the interest rate, at which point does one negotiate for a lower rate, when you take the initial 70k, or later when ready to use the PAL?
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