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New needs, low interest rates: An opportune time to borrow

With rates hovering near an all-time low, now may be the time to consider borrowing

Overhead photo of a woman carrying a moving box.

Do you have current needs that borrowing could help fund?

Look to your savings, but think carefully about selling investments

While selling securities to fund goals may seem like your only option, doing so can lock in losses from recent volatility, prevent possible future growth, cause an imbalance in your portfolio and trigger tax consequences. If your savings won’t comfortably cover your objective and you believe that liquidating your investment assets may be your only choice, talk to your advisor to see if there may be potential borrowing solutions that align with your financial goals. Taking advantage of a low-rate environment may offer benefits such as lower payments1 and a higher monthly cash flow, as well as the ability to restructure or consolidate debt.2 Borrowing may help you maintain liquidity and stay invested for longer-term goals. Along with the potential benefits, it’s also important to understand the risks of borrowing (see “Risks” section).

Consider your borrowing choices

Your choices will depend on a number of factors, but a good starting point is deciding what you want to achieve and the collateral you have available.

Private Client Line(PCL)3

A PCL account from Bank of America is a flexible line of credit that can be used for almost any purpose, including home renovations, debt consolidation, education costs, tax payments, real estate purchases and more.

A PCL account uses your eligible investments as collateral, giving you easy access to funding with flexible terms/repayment options. Eligible securities can be held in either your investment management account at Bank of America Private Bank or your brokerage account at Merrill Lynch, Pierce, Fenner & Smith Incorporated.3

Home equity line of credit (HELOC)

A HELOC from Bank of America is a low-rate, flexible way to help pay for things like home remodels, consolidate higher interest rate debt, tuition and more.

A HELOC uses a portion of the available equity in your home to provide a line of credit that you can access on demand during the 10-year draw period.


Bank of America offers fixed-and adjustable-rate mortgage options to pursue your home purchase needs.

A mortgage may offer flexible payment and down payment options as well as relationship pricing.

Be rewarded

As a Bank of America Private Bank client, you are eligible to enroll in the Preferred Rewards Diamond tier,4 and could receive additional benefits, such as:

  • A 0.25% interest rate reduction on a new purchase or refinance mortgage when you enroll in PayPlan, our automatic payment service, from your Bank of America account.5
  • A 0.625% interest rate discount on a new HELOC. You may also be able to lower your HELOC interest rate by setting up automatic payments from your Bank of America account.6


Private client line (PCL) Borrowing

Securities-based financing involves special risks. Clients should review their PCL Loan Agreement and related documents and disclosures carefully and consult with their own independent tax and legal advisors.

Some risks to consider include:

  • A decline in the value of collateral assets may require the client to provide additional funds or securities to avoid a collateral maintenance call. Clients can lose more funds than are held in the collateral account. The PCL account is a full recourse loan and the account holder will be liable for any deficiency.
  • Bank of America ("The Bank") can force the sale or other liquidation of any securities or other investment property in the collateral account and, unless otherwise required by law, can do so without first contacting the account holder.
  • The account holder is not entitled to choose which securities in the collateral account are liquidated or sold.
  • The Bank can change its collateral maintenance requirement at any time without notice to clients.
  • Clients are not entitled to an extension of time to satisfy the Bank’s collateral maintenance requirement.
  • There may be adverse tax or other consequences to clients if securities are sold or otherwise liquidated by the Bank.
  • The PCL account is an uncommitted facility, although loans to individuals and trusts may be committed in an amount not to exceed $100,000. The Bank may demand full or partial repayment at any time, and any commitment may be immediately terminated.
  • For fixed-rate advances and term loans, principal payments made in advance of the end of the applicable fixed-rate period, whether voluntarily or involuntarily (due to demand or liquidation by the Bank), may be subject to a substantial breakage fee as determined by the Bank.
  • Some restrictions on the use of a PCL account proceeds may apply under the terms of loan documents and applicable laws and regulations. The PCL account cannot be used to purchase marketable securities unless specifically agreed by the Bank.

Home equity line of credit (HELOC)

  • Interest rate risk: As a variable-rate loan, interest rates and payments can change. Clients should carefully consider these risks before borrowing.
  • HELOC funds may not be used to purchase, carry or trade securities or repay debt incurred to purchase, carry or trade securities.
  • To obtain a HELOC from Bank of America, a security interest will be taken on borrower’s primary residence.
  • Potential repayment volatility - If you opt for an initial interest-only period, at the end of this period, you will still owe the original amount borrowed, and the monthly payment will increase significantly and may result in "payment shock" - even if interest rates stay the same. If you want to make interest-only payments, we should discuss what the payments will be after the end of the interest-only period.
  • Please note: in order to qualify for a HELOC with Bank of America, you must (1) either currently own your house outright with no mortgage payments or have a mortgage serviced by Bank of America, and (2) have a Bank of America checking, savings or personal Merrill investment account. Certain Bank of America HELOC clients may qualify to refinance their existing HELOC without the preceding requirements.

Get started

No one is sure how long rates will remain low, so now may be the right time to act. If you'd like to learn more about your borrowing options and how low interest rates could help you pursue your goals, contact your Merrill Lynch Wealth Management Advisor. Consult your legal or tax advisor for additional guidance on tax implications of financing options.7

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