Fidelity Investments: Applying For A Loan

Fidelity Investments offers a range of loan options, including margin loans, securities-backed lines of credit, home equity lines of credit, and personal loans. The specific loan option that is best for you will depend on your financial situation and goals. Margin loans, for example, are typically used by active traders to buy more securities, while a securities-backed line of credit can provide access to cash for real estate, tuition, or other major purchases. A home equity line of credit can be a flexible way to borrow money for various purposes, and personal loans can be used to fund large expenses or pay off credit card debt. Before applying for a loan with Fidelity Investments, it is important to carefully consider your financial situation and goals, as well as the potential risks and benefits of each loan option.

Margin loans

A margin loan allows you to borrow against the value of securities you already own. It's an interest-bearing loan that can be used to gain access to funds for a variety of reasons that cover both investment and non-investment needs. Margin loans can be used to satisfy short-term liquidity needs in a similar way to a home equity line of credit.

Advantages of Margin Loans

There are no closing costs, annual fees, setup fees, or non-use fees that you may find on other types of traditional loans. Margin interest rates are typically lower than credit cards and unsecured personal loans.

Disadvantages of Margin Loans

Before using a margin loan, carefully review your investment objectives, financial resources, and risk tolerance to determine if it's an appropriate borrowing mechanism for you. Margin trading entails greater risk, including the risk of loss and the incurrence of margin interest debt, and is not suitable for all investors.

If the market value of the securities in your margin account declines, you may be required to deposit more money or securities to maintain your line of credit. If you are unable to do so, Fidelity may be required to sell all or a portion of your pledged assets. Losses greater than the original investment are possible. Interest rates may rise, increasing the cost of your loan.

Eligibility

Margin is a feature you can add to one of the following types of accounts:

• Individual brokerage
• Limited liability company (LLC)
• Unincorporated association

The following securities are eligible to use as collateral for margin borrowing:

• Most equities trading over $3 a share
• Most mutual funds and ETFs that have been held for at least 30 days
• Treasury, corporate, municipal, and government agency bonds

Personal loans

Types of Personal Loans

Fidelity Bank offers both secured and unsecured personal loans. A secured loan is protected by an asset, such as a car or property, which can be repossessed by the lender if you fail to make repayments. Unsecured loans are not protected by any collateral, and are instead based on your creditworthiness and ability to repay. Fidelity Bank also offers a range of specialised personal loans, including:

• Auto loans for purchasing or refinancing a new or used car, truck, or recreational vehicle.
• Home equity loans that allow you to borrow against the equity in your home.
• Construction loans for remodelling or building a new home.
• Personal lines of credit that give you access to a set amount of money, which you can borrow from as needed.

Eligibility and Requirements

To be eligible for a personal loan with Fidelity Bank, you typically need to be an existing customer with an active account and a clean credit report. For salary-based loans, you must also be a salary earner with your salary domiciled with the bank. Specific requirements may vary depending on the type of loan, but general information that may be needed includes:

• Tax identification number.
• Valid government-issued photo identification.
• Mailing and physical address.
• Contact phone number.
• Mother's maiden name for additional security.
• Citizenship or residency status.
• Source of funds (e.g. wages, self-employed, etc.).
• Financial documentation (e.g. tax returns, pay stubs, etc.).

Application Process

You can apply for a personal loan with Fidelity Bank online, over the phone, or by visiting a local branch. The application process is straightforward and hassle-free, and you can expect a quick turnaround. For online applications, you may receive a response in minutes and have the money in your account within a few days.

Loan Amount and Repayment

The loan amount you can borrow will depend on your deposit relationship with the bank and your credit information. Fidelity Bank typically offers personal loans of up to $25,000, with flexible repayment plans and competitive interest rates. Make sure to discuss the specific terms and conditions of your loan with a lending officer to understand the repayment schedule and any associated fees.

Auto loans

Applying for an Auto Loan with Fidelity Bank

Fidelity Bank offers auto loans for new and used cars, trucks, and recreational vehicles. The application process is designed to be convenient and hassle-free, with swift approvals and competitive rates.

How to Apply

• Contact a Lending Officer: Get in touch with a lending officer at Fidelity Bank to discuss auto loan rates and terms. You can do this by visiting the local branch in Northeast Pennsylvania or Lehigh Valley, or by reaching out online or by phone.
• Complete the Application: Provide the necessary information and documentation to apply for the auto loan. This may include details such as your financial situation, the vehicle you intend to purchase, and your credit score.
• Approval and Funding: Fidelity Bank's local decision-making process ensures swift approvals. Once your loan is approved, you can finalise the purchase of your vehicle.

Benefits of Fidelity Bank Auto Loans

• Local Decision-Making: Auto loan decisions are made locally, allowing for a personalised service that understands your needs.
• Swift Approvals: The efficient approval process means you won't have to wait long to hear back and can get closer to purchasing your vehicle.
• Competitive Rates: Fidelity Bank offers affordable loan rates designed to fit your budget, reducing financial stress.
• Personalised Service: The bank's team is committed to your satisfaction and will work with you to find the best loan solution for your financial situation and goals.

Fees and Requirements

There is a \$75 document preparation fee and a \$10.95 credit report fee for all consumer loans. The rates quoted are for clients with auto-deduct from a Fidelity Bank checking account. Clients without auto-deduct will have a 0.25% increase in rates.

401(k) loans

A 401(k) loan allows you to borrow money from your retirement savings account. You can borrow up to 50% of your vested account balance or $50,000, whichever is less. If 50% of the vested account balance is less than $10,000, you can borrow up to $10,000. You will have to pay back the borrowed money, plus interest, within 5 years in most cases.

A 401(k) loan may be a better option than a traditional hardship withdrawal, but it is generally available only for active employees. You may need your spouse or domestic partner's consent to take a loan.

The pros of a 401(k) loan are that you don't have to pay taxes and penalties when you take the loan, and the interest you pay goes back into your retirement plan account. Also, if you miss a payment or default on your loan, it won't impact your credit score because defaulted loans are not reported to credit bureaus.

The cons of a 401(k) loan are that if you leave your current job, you might have to repay your loan in full very quickly. If you can't repay the loan for any reason, it's considered defaulted, and you'll owe both taxes and a 10% penalty on the outstanding balance if you're under 59 and a half. You'll also lose out on investing the money you borrow in a tax-advantaged account, so you could miss out on potential growth that could be more than the interest you'd repay yourself.

If you decide to take a 401(k) loan, it's important to pay it off on time and in full, avoid borrowing more than you need, and continue saving for retirement.

To take a 401(k) loan or withdrawal from your Fidelity 401(k), log in to NetBenefits to review your balances, available loan amounts, and withdrawal options.

Securities-backed line of credit

A securities-backed line of credit (SBLOC) allows you to borrow against the value of securities you already own. This can be a convenient way to satisfy short-term liquidity needs, similar to a home equity line of credit.

SBLOC allows you to access funds for a variety of reasons, including both investment and non-investment needs. You can borrow against the value of your Fidelity investment portfolio by pledging your assets as collateral. The amount you can borrow depends on the value of the assets you pledge, with a minimum line of credit amount of $100,000 and a typical minimum pledge of $500,000 in assets. You can use any combination of eligible accounts, including individual stocks and bonds, mutual funds, ETFs, or cash in your core position.

You can use the funds for a wide range of purposes, such as buying or renovating real estate, paying for a wedding or large items like a boat, tuition fees, or a tax bill. However, it's important to note that the funds cannot be used to purchase securities.

Interest and fees:

With an SBLOC, you only make monthly interest payments if you draw on the line of credit. The interest rate is variable and consists of two components: an interest rate spread ranging from 1.90% to 3.10%, based on the size of your line of credit, and a variable index charge using the Secured Overnight Financing Rate (SOFR). There are no setup, early repayment, origination, annual, or repayment fees.

Risks and considerations:

As with any loan, there are risks to consider. Borrowing costs may increase if interest rates rise. Additionally, if the market value of your pledged assets decreases, you may need to pledge additional collateral, repay the loan sooner, or surrender the collateral to the lender. Access to pledged assets may also be limited while the line of credit is active, and money movement requests may require lender approval.

How to get started:

To get started with an SBLOC, you can speak to a Fidelity representative by calling 1-800-Fidelity and asking for "Line of Credit." They can help you review your options and direct you to the application process, which only takes a few minutes to complete. Once approved, you can typically access the funds within a few business days.

Frequently asked questions