Collateral is the asset that is used to secure a loan. If the value of your securities fall below a certain level, your collateral can be liquidated in order to repay the balance in your Portfolio Line of Credit.
When would this happen?
Portfolio Line of Credit is a margin lending product offered only to clients of Wealthfront Advisers LLC by Wealthfront Brokerage LLC. You can learn more about Wealthfront Brokerage Corporation on FINRA's BrokerCheck.
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Wealthfront and its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisor. Financial advisory and planning services are only provided to investors who become clients by way of a written agreement. All investing involves risk, including the possible loss of money you invest. Margin lending can add to these risks, and investors should carefully review those risks as part of their overall financial strategy. Diversification strategies do not guarantee a profit or protect against loss in declining markets. Past performance does not guarantee future performance. Learn more about Portfolio Line of Credit in the Margin Handbook.
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