How is Margin Loan interest calculated and charged?

How is interest calculated?

You only pay for the M1 Margin Loan on the days you are borrowing. Interest accrues for each day that you use your line of credit and is billed monthly.  

For example, a client with a 7.25%* M1 Margin Loan interest rate would have a daily interest rate of 0.020139% (calculated as 7.25% / 360).   

If an M1 client  borrows $10,000 using a Margin Loan, they would accrue interest of $2.0139 per day (calculated as $10,000 * (7.25% / 360)).   

If a client borrowed this amount for the entire month (say 30 days), the interest billed for the entire month would be $60.42 ($10,000*(7.25% / 360)*30) and would be charged to their account on the third trading day of the following month. If they had at least $60.42 in the cash balance of the M1 Individual/Joint Brokerage Account or Trust Account the Margin Loan is from, the interest amount would be deducted from there. Otherwise, the interest amount would be added to their M1 Margin Loan balance, increasing the Margin Loan balance from $10,000 to $10,060.42.  


How is interest charged

With M1 Margin Loans, you will be charged interest at the end of every month—you’ll only pay for the line of credit you borrow.

You'll receive a statement each month that displays the range of dates covered in the bill, as well as the amount of interest accrued.

The interest amount due is deducted from your cash balance (if available), or it will be added to your amount borrowed.

  1. Cash balance: We always pull from the cash you keep in your account first if there is cash available.
  2. Borrow additional funds: If your cash balance is insufficient and you have not maxed out your available credit, we will borrow more to cover the cost of your interest. We do this so you avoid having to sell securities from your portfolio and avoid taxable events. This also helps keep your loan on your schedule so you can repay it when it’s most convenient for you.


*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.




M1 disclosures here.

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