This guide explains how interest is calculated and charged for M1 Margin Loans. Learn how daily interest accrues, how it's billed each month, and what happens if you don’t have enough cash in your account to cover interest.
How is margin loan interest calculated?
Interest accrues daily: You only pay interest on the days you have a margin loan balance.
Daily interest rate: The annual interest rate is divided by 360 to get the daily rate.
Example: M1 Margin Loan interest calculation
If your interest rate is 5.65%, your daily rate is 0.0156944% (5.65% ÷ 360).
If you borrow $10,000, the daily interest is $1.57 ($10,000 × 0.0156944%).
For a month with 30 days, the interest charged would be $47.10 ($1.57 × 30).
How is margin loan interest charged?
M1 deducts the previous month’s interest automatically on the third trading day of the following month, before the morning trade window, in this order:
Cash balance: Interest is taken from your available cash in the account associated with your Margin Loan.
Increase Margin Loan: If cash is insufficient and you have available margin, your Margin Loan balance will increase to cover the interest charge.
Sell Investments: If steps 1 and 2 aren't possible, M1 will sell investments in your account to cover the interest payment.
Reviewing your margin loan interest charges
Your Margin Loan statement will be available at the end of each month. You can find it under “Bills” on your Margin Loan dashboard.
*Rates may vary
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.
This content was generated using artificial intelligence and is intended for informational and educational purposes only. While reasonable efforts are made to ensure accuracy, AI-generated outputs may omit key context; and should not be construed as financial, investment, legal, or tax advice. Users should independently verify all information and consult a qualified professional before making any financial decisions.
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