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M1 Finance Borrow review

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Use your investment portfolio as collateral on an inexpensive line of credit.

Bottom line: M1 Finance users can take advantage of low interest rates and borrow large lines of credit starting at $3,500. But unless you have $10,000 in a diverse M1 portfolio, you won’t be eligible. Read the full review.

Starting from 2%

APR

No minimum credit score

Min. Credit Score

Details

Product NameM1 Finance Borrow
Min. Loan Amount$3,500
APRStarting from 2%
Interest Rate TypeFixed
Min. Credit ScoreNo minimum credit score
Origination FeeNone
Loan TermNone stated
Turnaround TimeNext business day
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Review by


Kellye Guinan is a seasoned financial writer with over 500 articles under her belt spanning all things loans from auto to personal to business and everything in between. With four years in the field and five years of research experience, she's able to make complex personal finance decisions easier for everyday people to tackle. When she's not up to her knees learning about the latest trends in lending, she spends her time improving her own financial literacy and expertise.

Expert review

M1 Finance offers secured lines of credit on all investment portfolios through its app. It receives decent ratings overall, doesn’t require credit checks and has low rates – especially for M1 Plus members. But you’ll need to have at least $10,000 in your portfolio and can only borrow 35% of your portfolio’s equity at any given time.

If you’re not already set up on M1 or aren’t close to the $10,000 minimum, consider other personal loan options instead.

Pros

  • No credit check required
  • Extremely low rates, especially for M1 Plus members
  • Generally positive customer reviews

Cons

  • Must have at least $10,000 in eligible M1 brokerage account
  • Margin lending is always risky
  • High maintenance margin of 25% to 30%

M1 Finance rates, fees and terms

M1 Finance issues lines of credit secured by your brokerage account. You can borrow up to 35% of your total portfolio as needed – as long as you have at least $10,000 invested. Interest rates are variable — as of March 2021, they are set at 3.5% for regular users and 2% for M1 Plus members.

Like all lines of credit, interest is only charged on the amount you borrow. It accrues daily, and there is no set repayment schedule. However, interest payments are automatically deducted from your M1 cash balance every month.

If there isn't enough to cover your bill, M1 Finance will either make an additional draw on your behalf from your line of credit to cover interest owed or sell holdings from your portfolio. In this case, you may owe taxes on what is sold.

How maintenance calls work

M1 Finance has a minimum maintenance threshold starting at 25%, but it states that the typical threshold is 30% of your account value – and it could be even higher. If the equity in your account falls below this maintenance threshold, M1 Finance will issue a maintenance call.

A maintenance call requires you to deposit additional funds into your brokerage account or sell a portion of your portfolio. When a maintenance call is issued, you can view your options and get specific details through the app or by contacting M1 Finance's customer service team.

How M1 Finance compares to other lenders

M1 Finance is a secured line of credit that uses your brokerage account as collateral. So if you don't have $10,000 in assets, you should browse other options when you need a personal loan.

Name Product Filter Values APR Min. Credit Score Loan Amount
Best Egg personal loans
5.99% to 29.99%
600
$2,000 – $50,000
A prime online lending platform with multiple repayment methods.
SoFi personal loans
5.99% to 18.85%
680
$5,000 – $100,000
A highly-rated lender with competitive rates, high loan amounts and no fees.
Upgrade personal loans
5.94% to 35.97%
600
$1,000 – $50,000
Affordable loans with two simple repayment terms and no prepayment penalties.
Credible personal loans
2.49% to 35.99%
Fair to excellent credit
$1,000 – $100,000
Get personalized rates in minutes and then choose an offer from a selection of top online lenders.
Upstart personal loans
7.68% to 35.99%
580 or 600 depending on state of residence
$1,000 – $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
LendingClub personal loans
8.05% to 35.89%
640
$1,000 – $40,000
A peer-to-peer lender offering fair rates based on your credit score.
LendingPoint personal loans
9.99% to 35.99%
585
$2,000 – $36,500
Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.
OneMain Financial personal loans
18% to 35.99%
Varies
$1,500 – $20,000
An established online and in-store lender with quick turnaround times. Poor credit is OK.
Monevo personal loans
1.99% to 35.99%
None
$500 – $100,000
Quickly compare multiple online lenders with competitive rates depending on your credit.
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M1 Finance reviews and complaints

BBB accredited No
BBB rating A-
BBB customer reviews 1.48 out of 5 stars, based on 29 customer reviews
Trustpilot Score 3.1 out of 5 stars, based on 4 customer reviews
Customer reviews verified as of 08 April 2021

While M1 Finance receives overall decent ratings, it seems a large volume of recent users struggled to contact customer service. With only an email form available – no direct email address or phone number – this isn't surprising.

The positive reviews all say M1 Finance has a good app layout and is easy to use. But there isn't much feedback on its line of credit option.

How to qualify

There is only one set requirement: You must have $10,000 or more invested into a taxable brokerage account, not including an IRA. M1 Finance doesn't perform a credit check, and you won't need to submit any additional paperwork.

How the application works

There is no application. Everyone with a qualifying M1 brokerage account is automatically eligible for a line of credit.

To use yours, you'll simply need to visit the Borrow tab on the app. From here, you can select how much you want to draw and where you want your funds delivered.

Make a payment at any time through the M1 app. All you need to do is enter how much you want to pay back and select how you want to pay: From your M1 Spend account, your Invest account or an external bank account.

Why was my request denied?

There are two reasons why you weren't eligible for funding:

  • Your portfolio isn't sufficiently diverse, as determined by M1
  • You request to borrow more than 35% of your portfolio's value

What sets it apart

M1 Finance isn't only a lender. It's an investment app that allows you to build wealth and your portfolio. It has digital banking services that include a 1% APY and 1% cash back on some purchases.

But to take advantage of many of its top features, you'll need to be an M1 Plus member. It costs $125 a year – much more than similar neobanks.

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