Schwab PAL vs. Wealthfron PLOC
Wealthfront is offering (to me, essentially the equivalent) "Portfolio" line of credit where the APR is 4.71%, and you can borrow up to 30% of my portfolio. I'm trying to understand what is the gotcha here for Wealthfront, since Schwab's PAL APR is so much higher.
For Schwab, a PAL on the basis of a $2.5M loan value of collateral at origination, I'm paying SOFR+2.4% = 5.97%, before advantage pricing. Even assuming I have $10M+ in qualifying investments and get a 100 bps discount, still at 4.97%.
What am I missing? Should I use up my Wealthfront PLOC $s first (obviously with some buffer, I won't be drawing to the "up to amt" since I don't want to be margin called).
Purpose of this is to pay for down payment without having to sell shares, much of which have a lot of cap gains on top for me.