margin interest


An interest rate applied to a loan or margin extended by a broker. When an investor wishes to make a purchase that is in excess of the cash in hand, a brokerage firm will automatically provide access to additional capital. An interest rate will be applied to this extension of a loan, which compensates the brokerage firm for access to the capital.

Use margin interest in a sentence

When a bank provides additional capital to complete a transaction, they apply margin interest on the capital as additional compensation.

​ Was this Helpful? YES  NO 10 out of 10 people found this helpful.

Show more usage examples...

Related Terms

Browse by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Margin Department gross yield