How to Borrow Money from Robinhood Through Margin Investing?

Investing has definitely been made easy at Robinhood as it allows you to choose from thousands of available stocks and Fractional Shares, use Desktop app, and Robinhood employe unsettled funds as well. Moreover, you can increase your buying power and get more leverage to purchase the stocks by knowing how to borrow money from Robinhood. 

What Will We Talk About Here?
  • Robinhood margin investing requires you to have a Robinhood Gold Account and a portfolio value of at least $2000 or $25,000. 
  • To get margin investing on Robinhood go to the  Robinhood App > Person Icon > Hamburger Icon > Yellow Icon > Margin Investing > Turn on Margin > Confirm. 
  • You can increase your margin if your account is not in deficit and if you have  not received any margin call. 

…and Much More!

How To Borrow Money from Robinhood Through Margin Investing?

Margin investing is referred to as the money borrowed from the broker to purchase an investment. Typically, it is explained as the difference between the total value of an investment and the loan amount borrowed. 

An investor can utilize the margin account i.e., the standard brokerage account to utilize the current cash or securities. These are collateral for a loan. Purchasing securities through the margin is quite effective and similar to using current cash in the account. 

  • Robinhood is one of the best applications to start with your investing journey. You can start building your portfolio with just $1 and commission-free.

Besides supporting quick transfers to bank account, an amazing feature of Robinhood is the investing feature. It allows you to borrow money from through which you can purchase securities. This access is based on the value of certain securities in your brokerage account. 

Conventionally, where you had to deposit from your bank to invest, margin investing eliminates it all. To invest instantly, you can utilize the margin investing feature providing easiness with cash. 

Attention! Borrowing money from Robinhood through margin investing requires an upgrade to Robinhood Gold. Extra buying power means the money you will be borrowing from Robinhood to invest. 

The Other Side of Margin Investing

While margin investing from Robinhood is a great deal, it comes with an equal share of potential risks. Whether the returns are negative or positive, they have a direct impact on your brokerage account value. 

For instance, if the stock loses its value, the losses are directly deducted from your account value. In addition to this, you can lose more money than what you deposit. Another potential risk that you are likely to face is no extension time on the margin call. 

Before stepping into margin investing, it is important that you are well equipped with all the risks involved. It can happen as well where you get into the margin debt. In this case, the company can sell your assets or securities to pay off this debt. 

With margin investing, you can preserve your extra cash by borrowing some amount from Venmo. Robinhood Financial offers margin investing to increase your potential gains. To qualify for the margin at Robinhood, make sure you fulfill the eligibility criteria. 

You will require a Robinhood Gold subscription at $5 a month to avail of this feature. Additionally, you will also have to pay $1000 and a 2.5% interest rate for the margin. If you are a designated day trader, you must have a portfolio value of at least $2000 or $25,000. 

Get Margin Investing on Robinhood – Step by Step Guide 

Now that you are well aware of the pre-requisites of margin investing, here is the detailed procedure on how to borrow money from Robinhood. 

  1. Go to the Robinhood app on your device. 
  2. From there, click on the person icon present at the right bottom of the screen. 
  3. Next, click on the hamburger icon (three horizontal lines) menu icon on the top right. 
  4. Once done, select the yellow icon present at the top right corner of the screen. 
  5. Select the option of Margin Investing from there. 
  6. Next, click on Turn on Margin.
  7. Now for the Robinhood app as it checks your eligibility criteria for margin investing. 
  8. Once done, click on the option of Confirm. And that is it! 

This is how you can easily get margin investing on Robinhood. Just keep under consideration the potential risks involved. You are bound to pay the interest back no matter how your investment results turned out. 

You might be interested in reading: Robinhood Canada.

Method to Increase Available Margin

Robinhood margin investing also facilitates the investors to increase the window of their available margin. The process is straightforward and you have to ensure a few things to do so. First, come first, make sure that there is no deficit in your account. 

Another feature to keep in mind is that under no circumstance you would have received a margin call. By guaranteeing these two factors, you can easily increase the available margin. On the contrary, if you have set up a borrowing limit, then you won’t be able to increase the margin. 

  • Robinhood allows you to set up a borrowing limit too. By defining the limit, you will only be able to buy a certain amount.

Once you take care of these two factors, you can add more money to your Robinhood Gold Account. As you increase the portfolio value, you directly increase your margin. The ideal scale is around 1:1, which means there should be the same available margin for a $4000 account. 

When the marginal securities in your account appreciate, your available margin goes up for sure. For instance, if you increase the cash account value to $3000 by depositing a $1000, you can increase the margin up to $3000. 

You might be interested in reading: eToro Canada.

The Bottom Line 

Robinhood Financial is one of the authorized and registered broker-dealers and you can easily learn how to borrow money from Robinhood. It provides various financial services to the customers. You can perform cryptocurrency trading, margin investment, access stocks, EFTs, and more.

  • No matter what investment you make, each of it involves risk including the loss of principal. 

The same is the case with margin investing at Robinhood. It equally involves the interest charges in addition to potential risks. It is important that you think of the trading strategy that would fit the best to your interests. Just note that the margin interest rate can change at any time and at the discretion of Robinhood Financial. 

Frequently Asked Questions 

How much can you borrow from Robinhood? 

Customers can borrow up to $1000 for just $5 a month for investment purposes. If you are buying anything above this limit, you have to pay an annual interest rate on the loan. 

Can you withdraw all your money from Robinhood? 

Yes, you can make up to 5 withdrawals into your account and up to $50,000 per business day. 

How long is the withdrawal time at the Robinhood? 

You will have to wait for at least two days. And the funds from the Robinhood transaction can be accessed on the third day of the trade. 

How can I turn off share lending on Robinhood? 

Log in to the account > Account > Settings > Robinhood Gold > Margin Investing > Disable Margin Investing > Account > Investing > Day Trade Settings > Disable Instant Settlement.