Loan Consent Agreement

Definition - What does Loan Consent Agreement mean?

Loan Consent Agreement is the portion of the margin agreement that allows the broker dealer to loan out the customer’s securities to another customer who wishes to borrow them to sell the security short.

Testopedia explains Loan Consent Agreement

When a customer opens a margin account the customer must sign the margin agreement which will spell out the terms and conditions under which credit it will be extended. The customer will be asked to sign a loan consent agreement which will allow the broker dealer to lend out their securities to customers who want to sell the securities short. The loan consent is the only part of the margin agreement what the customer is not required to sign.

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