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How do M1 Margin Loans work?
Updated this week


To be eligible to take an M1 Margin Loan, you need to have at least $2,000 invested in your M1 Individual Brokerage Account, Joint Brokerage Account, or Trust Account. You can usually borrow up to 50% of the value of eligible securities.

Not all securities can be used as collateral for a Margin Loan. Each brokerage has its own terms for Margin Loans including the list of marginable securities, minimum equity requirement, and the percentage of portfolio value you can borrow.


Margin Loans give you more repayment flexibility compared to some fixed-term loans like Personal Loans or mortgages. You can repay a Margin Loan balance when it works for you (except in the case of a margin call).

You will be charged monthly interest until you pay back the loan. Interest is deducted once a month from your Brokerage Account’s available cash balance. If there’s not enough available cash to cover interest, we’ll add the interest to your Margin Loan balance. you’ve run out of available cash and available margin, we’ll sell investments to cover interest costs as a last resort.

Learn more about M1 Margin Loan billing.

Margin Requirement

The Federal Reserve’s Regulation T requires an investor to pay for at least 50% of their marginable securities using their own cash. This is referred to as an initial margin requirement.

Let's say you want to buy 100 shares of Stock A priced at $50 per share and you have only $2,500 and not the entire $5,000. With a 50% initial margin requirement, you can only take a Margin Loan up to $2,500 (50% of the total value) and would have to pay the remaining 50% using your own cash. The borrowed amount as a percentage of the total investment value is called the initial margin. Your account equity in this example would be $2,500 ($5,000 investment value minus borrowed amount).

Borrow margin example

Once you purchase securities on margin, FINRA Rule 4210 requires an investor to maintain a minimum equity of 25% of the total value of securities. This is referred to as a maintenance margin requirement.

Typically, when the market fluctuates and the value of your portfolio depreciates such that your equity drops below the maintenance margin requirement, a maintenance margin call will be triggered by your brokerage.

When there is a maintenance margin call, you will need to bring your equity back above the maintenance margin requirement by either depositing funds or selling securities.

While these are the minimum requirements mandated by the regulation, a brokerage could have higher minimum requirements to allow some fluctuations in portfolio value without triggering a maintenance margin call.

*Requirements could vary for securities held short.

Brokerage accounts on the M1 platform are either fully disclosed to APEX Clearing or cleared through M1 Finance LLC. Please look at your account statement to determine how your account is cleared.

All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using margin can add to these risks. Users utilizing APEX cleared margin accounts should review the APEX margin account risk disclosure before borrowing. Users utilizing M1 cleared margin accounts should review the M1 margin account risk disclosure before borrowing. M1 Margin Loans are available on margin accounts with at least $2,000 invested per account. Not available for Retirement or Custodial accounts. Margin rates may vary.

Brokerage products and services are offered by M1 Finance LLC, Member FINRA / SIPC, and a wholly owned subsidiary of M1 Holdings, Inc.


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