Best Margin Loan Rates Comparison for 2018

Margin loans are one of the major credit facilities offered by money lending institutions. Different lenders offer various rates for margin loans. Having information about the interest rates charged by different institutions is crucial. Apart from the interest rates, other hidden charges may accompany the loan. It is also imperative to unearth these charges before the application. This article will focus on the best margin loan rates comparison for 2018 to help you in your decision making, especially if you are planning an early retirement.

What is a Margin Loan?

A margin loan is a credit facility whereby the borrower obtains a loan, and uses shares and other managed funds as the collateral. When a money lending institution gives the loan, the borrower dedicates the shares to be the loan’s security. This means that if the borrower defaults in paying the loan, the lending institution will sell the shares to recover the money. Shares are always changing in value.

The borrower is usually disadvantaged when the share value drops. Money lenders have criteria that they use to gauge the risk associated with a particular loan. The most commonly used criterion is the Loan to Value Ratio (LVR). This is calculated by dividing the amount of loan versus the value of the borrower’s shares. Most money lenders require the borrower to maintain the LVR below 70%.

What to Look for in a Margin Loan?

A margin loan is usually a risky way to raise money. Many people apply for this loans to invest in another entity. However, the loan is only risky to the borrowers who do not research well before applying for the loan. It is important for an applicant to consider some factors before applying for this credit facility. Some of these factors include:

1. Goals

An applicant should have well defined goals before making the step of applying for this loan. Most borrowers use this credit facility to buy more shares. However, the applicant needs to be sure that this is the right investment. Some investors use this loan to advance other investments. Putting borrowed money in the wrong investment can lead to financial constraints if the investment fails.

2. Features

It is also crucial for the borrower to have well defined features of what he/she expects in a particular margin loan. Different loan providers have varying features. Margin loan rates comparison is therefore compulsory for serious business minded applicant. The applicant should compare features such as the required repayment period and the loan limits of different creditors.

3. Marginal call

A marginal call is the situation where the borrower is required to pay the lender when the shares value reduce. A fall in the shares value leads to an increase in LVR. Margin loan rates comparison enables the borrower to establish which lender gives the highest LVR. This is very important, as marginal call is an almost unavoidable scenario given the fluctuating nature of shares.

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Best Margin Loan Rates Comparison for 2018

The best way to identify the right margin loan giving institution is to compare the different types of the lenders in the market. Margin loan rates comparison gives the borrower a scope of what to expect. This is imperative, as many borrowers always will always have difficulties in loan repayment just because they did not choose the right lender. It is important to look out for features such as the interest rates and the minimum share requirement when comparing marginal loans companies.

The LVR is also an important factor that should be taken into account. The higher the LVR, the more affordable it is for the borrower in case the value of the shares drops. Having a high buffer margin is also an added advantage for the borrower. Some of the top margin loans providers in 2018 include those mentioned in the table below. The number of shares indicates the number of companies that can be taken as security, as listed on the stock exchange.

Company Interest Rate No of Shares Average LVR Shares Marginal Call Buffer Margin Website
Nabtrade 6.45% 502 60.00% 30 hours 5.00%
Westpac 5.20% 237 65.00% 36 hours 10.00%
ANZ 7.03% 707 59.48% 24 hours 5.00%
CommSec 6.63% 562 58.76% 24 hours 5.00%
BT Margin Lending 7.12% 494 60.00% 36 hours 10.00%

*** Disclaimer: The data listed above may be subject to changes on a daily basis, so users should access each company’s website for the latest updates.

1. Nabtrade

This is one of the leading marginal loans providers. The company charges an interest rate of 6.45%. The interest is charged on arrears only. They provide marginal loans not exceeding $200,000. For one to be eligible for marginal loans from this company, you are required to have a minimum of 502 shares. In case your share value drops, you will be required to make payments within 30 hours.


  • The company allows the customer to engage in options trading.
  • The lender also allows gearing of installments.
  • International shares can be used as security.
  • Dividends from the shares are paid to the applicant’s bank account.


  • With Nabtrade, the borrower is not assured of instant loan approval
  • The borrower doesn’t have the option of selling shot put.

2. Westpac

This company has an interest rate of 5.2%. It also charges interest on loan arrears. To be eligible for this marginal loan, you require a minimum of 237 shares. The company requires its customers to maintain an LVR of 65%. They have a buffer margin of 10%. This means that the LVR can be allowed to increase by 10% before the lender makes a margin call. They make a marginal call in 36 hours.


  • They allow gearing of installments.
  • The shares dividends are paid to the applicant’s bank account.


  • International shares cannot be used as security.
  • Instant approval of the loan is not guaranteed.
  • They do not allow options trading.

3. ANZ

ANZ gives marginal loans at an interest rate of 7.03%. The interest is also applied to arrears. The minimum share requirement for this loan is 707 shares. The lender has an average LVR requirement of 59.48%. When the LVR rises above this rate, the lender makes a marginal call after 24 hours. They allow a buffer margin of 5%. The loan can be repaid within a varying period depending on the agreement between the lender and the borrower.


  • The lender allows options trading.
  • Installments gearing is available.
  • Dividends from the loan are paid directly to the applicant’s bank account.


  • The borrower is not guaranteed of instant approval.
  • International shares cannot be used as security.

4. CommSec

This company charges an interest rate of 6.63%. The interest is charged on arrears. The borrower should have a minimum of 562 shares to qualify for this marginal loan. They have a maximum LVR of 58.76%. A marginal call is made 24 hours after the shares value drops. CommSec allows a buffer margin of 5%.


  • Allows options trading.
  • Allows installments gearing.
  • International shares can be used as security.
  • Dividends are paid directly to the bank account.


  • The creditor does not guarantee instant loan approval.

5. BT Margin Lending

This lender charges an interest rate of 7.12%. The borrower is required to have a minimum of 494 shares to qualify for the loan. The borrower is also required to have a maximum LVR of 60%. A buffer margin of 10% is given. When the maximum LVR is exceeded, the lender is entitled to a margin call after 36 hours.


  • Dividends are paid directly to the bank.
  • Options trading is allowed.
  • Installments gearing is also allowed.


  • There is no instant loan approval.
  • International shares cannot be used as security.


The importance of margin loan rates comparison cannot be undermined. Without a well-researched basis to refer to, a loan applicant is prone to making the wrong choice. A wrong choice translates to difficulties in repaying the loan, and this may lead to selling of the shares by the lender. The loan applicant should, therefore, conduct a good research on the different lenders in the market. Also, the borrower is supposed to have a source of funds to pay the loan in case of a marginal call. Shares can be so unpredictable at times, and a drop in value can cause the borrower much trouble if he/she doesn’t have a reliable source of funds.

Thank you for reading! Please share your thoughts on this margin loan rates comparison in the comment form below!

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