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Overview
A portfolio line of credit lets you borrow cash using your investments as collateral. This lets you access funds without selling your assets, so you can stay invested for long-term growth.
When you open a portfolio line of credit, you choose which investment accounts to use as collateral. The amount you can borrow (your credit limit) is based on the value of the assets in those accounts. You can borrow up to your limit at any time and pay interest only on the amount you borrow.
Open a personal portfolio line of credit
A portfolio line of credit is a separate account. You can open it following the steps below:
- Log in to the Wealthsimple app
- Swipe right to the Spend tab
- Tap Add account
- Select Portfolio line of credit from the list
- Tap Open account
- Follow the prompts to select your collateral accounts and confirm your details
- Log in to your Wealthsimple profile
- Select + Add an account from the Home page
- From the All accounts tab, select Portfolio line of credit
- Select Open account
- Follow the prompts to select your collateral accounts and confirm your details
Choose your collateral accounts
When you open your account, you choose which investment accounts to use as collateral. You can link up to five of the following accounts to secure your line of credit. They can be trading or managed accounts:
- Non-registered accounts (except margin accounts)
- TFSAs
Restrictions:
- We don't support using joint accounts.
- We don't support using FHSAs, RRSPs, RESPs, or LIRAs.
- To link a managed account, you must have at least $25,000 in assets under management across all accounts with us.
- You can't link an account that's already linked to a margin account.
- We don't support the following portfolio types: Alternative investments (Private Market Fund, Private Credit, and Private Equity), Summit, Target Date, or Direct Indexing.
Collateral minimum
In order to be eligible to be used as collateral, the account must provide a minimum credit limit of $1,000 CAD. The credit limit provided by an account is calculated by several factors based on the value of your assets in the account.
Add or change your collateral accounts
You can change which accounts to use as collateral at any time in the Wealthsimple app (not available on web):
- Log in to the Wealthsimple app
- Tap your Portfolio line of credit account
- Tap Settings in the top right corner
- Tap Collateral
- Select the accounts you want to use as collateral
- Review the Account linking disclosure if prompted and tap Confirm
- Tap Save to apply the changes
How to increase your credit limit
You can increase your credit limit in the following ways:
- Sell investments in your collateral accounts
- Transfer eligible holdings or cash into a collateral account
- Add another account as collateral to your portfolio line of credit
Borrow cash
Once your account is set up, you can borrow cash up to your credit limit. The cash that you borrow will be transferred to another account that you choose. You only pay interest on the amount that you borrow.
Follow these steps to borrow cash:
- Log in to the Wealthsimple app
- Tap your Portfolio line of credit account
- Tap Borrow
- Enter the amount you wish to borrow
- Select the account you want to transfer the funds to (for example, your chequing account)
- Follow the prompts to complete the transfer
- Log in to your Wealthsimple profile
- Select your Portfolio line of credit account
- Select Borrow from the right side of the account screen
- Enter the amount you wish to borrow
- Select the account you want to transfer the funds to (for example, your chequing account)
- Follow the prompts to complete the transfer
Repay your loan
You can pay back your loan balance at any time, and there's no minimum payment required. Interest is calculated daily and added to your loan balance each month until you pay it off.
Follow these steps to repay your loan:
- Log in to the Wealthsimple app
- Select your Portfolio line of credit account
- Tap Repay
- Select the account you want to pay from
- Enter the amount you wish to repay
- Follow the prompts to confirm the payment
- Log in to your Wealthsimple profile
- Select your Portfolio line of credit account
- Select Repay from the right side of the account screen
- Select the account you want to pay from
- Enter the amount you wish to repay
- Follow the prompts to confirm the payment
View accrued interest
You can view the amount of interest that has been accrued each month by tapping into your portfolio line of credit account. Interest is added to your loan balance on the 1st of each month and will be displayed on your account activities.
Interest rate
The interest rate for the portfolio line of credit is based on your client status:
| Status | Rate |
| Core | Prime + 0.5% |
| Premium | Prime + 0% |
| Generation | Prime - 0.5% |
Frequently asked questions
Do I have to complete a credit check to open a portfolio line of credit?
No, we don't run a credit check when you open a personal or business portfolio line of credit.
What's the difference between a portfolio line of credit and a personal line of credit?
A portfolio line of credit uses your investments as collateral, allowing you to borrow without selling assets, while a personal line of credit is unsecured and based solely on your creditworthiness.
Note: Wealthsimple doesn't currently offer a personal line of credit.
How is this different than borrowing from my margin account?
Your portfolio line of credit is a margin loan, but it's less risky. Here's why:
- Your credit limit is more conservative, so there's a bigger buffer to protect you if your investment collateral loses value.
- People typically use their portfolio line of credit to withdraw cash for everyday needs, not to buy more investments. This means losses aren't as magnified.
Learn more about borrowing from your margin account.
Can I claim interest as a tax deduction?
If you borrow money to invest, the interest is generally tax-deductible. However, if you borrow for personal use, you generally cannot claim that as a deduction. We recommend checking with a qualified tax expert for your specific situation.
How does borrowing affect my client status?
Borrowing cash from your portfolio line of credit and withdrawing it from Wealthsimple effectively reduces your assets under management. This can reduce your client status (for example, moving from Premium to Core).
Can I have both a business and a personal portfolio line of credit?
Yes. The business and personal portfolio lines of credit are separate products. You can hold both at the same time, as long as each one uses different eligible collateral accounts.
What is the Portfolio Line of Credit (PLOC) discount and how do I access it?
The Portfolio Line of Credit (PLOC) discount is a Generation benefit that reduces your borrowing costs. We show this discount separately from margin benefits to keep things clear. You can view your specific rates in your account benefits section.
Will my co-owner be able to see my portfolio line of credit (PLOC) balance?
No. Your co-owner can see that your joint account has overdraft coverage, but they can't see your PLOC balance or other details.
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