If you have a brokerage account, you can get a loan from your stockbroker by setting up a special margin account and using your securities as collateral.

Of course, you could simply sell your securities and use the cash. However, if you want to keep your portfolio intact and avoid paying capital gains taxes, you might consider a margin account - but with the greatest of care.

The interest rate on this type of secured loan is based on the broker call rate, the rate that banks charge brokers when they lend them money. The interest brokers charge typically runs from 0.5% to 3% above the broker loan rate. This interest can be deducted from your investment income on your 1040.

The Federal Reserve Board allows stockbrokers to make loans of up to 95% of the value of U.S. Treasuries and up to 50% of the value of stocks in a customer's accounts. However, many brokers set even more stringent requirements.

Sounds great. But there are high risks attached. If the value of your portfolio falls below a minimum amount, you will receive a margin call from your broker, meaning that you must come up with enough collateral to keep the loan. If you are short of ash can cannot meet the call, then your broker will sell enough of your remaining securities to do so. And, of course, the call always comes at the worst possible time - when your securities are tumbling in price.

To fully understand the pros and cons of this type of loan read the SEC's publication "Margin Trading" at: www.sec.gov/investor/pubs/margin.htm.

STAY TUNED. Next week we'll discuss IRA and 401(k) loans.