Facet Wealth Co-founder and Chief Evangelist Brent Weiss, CFP®, ChFC®, recently explained how margin accounts work to Business Insider. Essentially, he explained, a margin account is a way of borrowing money to buy stocks. As with other loans, borrowers pay interest. Because the stocks purchased with the proceeds from that borrowing are the collateral for the loan, interest rates tend to be lower than unsecured loans. “Think of it as an investment account with a line of credit attached to it,” he noted. But be aware that if the value of your stocks drop you may have to sell some of them to pay back a portion of the loan. Read more