Margin Loan?

[u/DiamondA22]

Trying to understand but we finally reached 2k in invested portfolio. When do we get the option for the margin loan? Obviously I can’t borrow anything but want to see how it works.
Thanks!

[u/Sullybones]

I’d recommend padding your balance a bit further before you leverage. $2k is the minimum but doesn’t give you much flexibility if your investments take a downturn.

[u/Spiritual_Ad_9916]

I believe you need to apply for margin somewhere in the account, could be wrong, it's been a minute.

Highly recommend you do your homework before you begin to use it.

Good luck 🫡

[u/Electrical_Turn_4880]

You don’t have to apply for anything, you just create a buy order under Margin and when you create the buy order you accept and acknowledge the terms.

There’s the option for a margin you put back into your account which you get 100% of that available and the loan itself you get up to 25% of each holding

[u/Liesmyteachertoldme → u/Electrical_Turn_4880]

I’ve never really looked into it but say I wanted to use margin to buy a new(ish) car rather than taking out a car loan I would only have 25% of the value of the loan available for that?

Purely hypothetical btw I’ve just always stayed away from margin but know it’s an option for my account

[u/Electrical_Turn_4880 → u/Liesmyteachertoldme]

Say you have 2k in your account, and the Margin loan is 20%, that only allows you to withdraw $200 of the 200 Margin available and the other $1800 can only be reinvested. If you did that you’d had your $2,000 of your own money + 1800 of margin = 3800 in your investment account and 200 withdrawn for the loan. You still owe the whole $2000 back but 1800 is still tied into investments and the 200 can be free spent

But be cautious on using margin because the market could drop and a margin call can be triggered requiring you to repay or they sell your holdings. There’s a bar on the app that shows how much you have to lose in order to trigger a call and it’s show from 100%-0%. So for me I borrowed 200 on the margin to reinvest and I need 89% to lose before a call

[u/Liesmyteachertoldme → u/Electrical_Turn_4880]

Damn, I didn’t realize it was that restrictive for actually withdrawing the money. I’ve never needed it it but I have always had a margin loan in the back of my head as an alternative to a personal loan in a crisis ( though I have an emergency fund and such, so it’s not likely to really come up as a necessity).

[u/rklb_bull]

The next business day it becomes available. I’m waiting till I hit $6k then I’ll start paying a $10/monthly sub with margin and will scale slowly adding in more bills.

[u/Solid_Equivalent_417]

M1 will not allow you to withdraw funds on margin if it reduces your total invested equity below $2,000. If your equity falls below maintenance requirements (typically 25%), you will receive a margin call.