Borrow against what you own, without selling it

Why borrow instead of selling

If you need cash but do not want to give up your investments, a Pinnora loan lets you borrow US dollars against stocks, funds or crypto you hold, at 8.9% APR or less. Selling would end your position and might mean selling at a bad moment. Borrowing keeps the investment, which stays yours, and gives you dollars to use now.

Your collateral is locked, not sold, for as long as the loan is open. Repay the loan and the same collateral comes straight back to you, worth whatever the market says it is worth that day.

How to take out a loan

1. Open Loans in the app and choose what to borrow against: any stock, fund or crypto you hold. Cash cannot be collateral — borrowing dollars against dollars would simply be your own money back.
2. Choose a loan-to-value. The app offers a few steps, from the safest up to the highest it allows, currently 65%, and tells you the most you can borrow at the step you chose.
3. Enter the amount. Before anything happens you see how much of your asset will be locked, the rate, what the interest comes to each month and the price at which your collateral would be sold.
4. Confirm. The loan opens straight away and the dollars land in your funding wallet. You are told the moment it opens, with the collateral, the loan-to-value and the rate.

Your rate is fixed when the loan opens

The rate a loan opens at is the rate it keeps. If Pinnora changes its rate later, the new rate applies to new loans only, never to one you already have. The current rate is shown on the Loans screen, and on each of your loans, so there is never any doubt about which applies.

There is no arrangement fee and no fee for repaying early. What a loan costs is its interest, and the app shows that before you confirm.

Loan-to-value, explained

Loan-to-value is the size of your loan compared with what your collateral is worth. Borrow $500 against investments worth $2,000 and your loan-to-value is 25%. The lower it is, the more room there is for the price of your collateral to fall before the loan is at risk.

Because collateral is valued at the current market price, your loan-to-value rises when that price falls. Each loan on the Loans screen shows what its collateral is worth now, its liquidation price and whether it looks healthy, at a moderate risk or at risk, so you can see where you stand at a glance.

When collateral can be sold

The liquidation price is the price at which your loan would reach 80% of what the collateral is worth. If the price of your collateral falls that far, the collateral can be sold at Pinnora’s price to repay the loan. Whatever is left once the loan is repaid is paid into your funding wallet in dollars, and you are told what was sold, for how much and why.

Borrowing less than the most you are offered, and keeping an eye on the price of what you borrowed against, is the simplest way to stay well clear of that point. You can repay at any time to take the risk away altogether.

Repaying

• One tap, in full. Each loan has its own Repay button, which repays the whole loan in one go, whenever you like.
• From your cash. The money is taken from your funding wallet first and then from cash in your trading account.
• Collateral back at once. Your collateral is released into your trading account the moment the loan is repaid, and you get a notification saying so.

Things to know

• A loan is secured on investments whose value can fall, sometimes fast. Crypto in particular can move a long way in a short time. Borrow what you are confident you can repay.
• Locked collateral cannot be sold, sent or withdrawn until the loan is repaid.
• Every loan and repayment appears in your transaction history, and your open loans are listed on the Statistics page with their loan-to-value.