Responsible borrowers tend to allow a gap of 2 percent in their margin loan repayment budget to account for possible rises in margin loan interest rates. Therefore, if rates unexpectedly rise in the near future, you can be sure that you have the cash to accommodate the higher level of repayments.
When shares are held for a short period before they are cashed in or transferred, many investors choose to only repay interest on their margin loan. Repaying interest is much cheaper than repaying the principal, but means that you miss out on the opportunity to gain equity through repaying your loan.
Compare margin loan interest rates to find some of the cheapest offers from your trusted margin lenders using our margin loan comparison tools.