But if investors were to sell stock to pay off margin loans, that could cause share prices to fall.

A margin loan, however, would not be deductible for such a personal investment.

Since the 1960's the maximum margin loan has been 50 percent of a stock's purchase price.

People who do use margin loans should take steps to protect themselves.

If someone takes out a margin loan to buy a car, for example, it is considered consumer interest.

So-called margin loans against the value of a portfolio may be made for any purpose.

But later, our margin loans were processed without any questions.

The margin loan stood at $620,524, leaving him with a net asset value of $551,000.

A margin loan taken out to pay a tuition bill or to buy a car, however, is not deductible.

Which means that he would be asked to put up more money or sell shares to satisfy the terms of his margin loan.