How does the interest on stock margins work?

Question

If you buy stock on margin, you have to pay interest on the money, right? How and when is it charged to your brokerage account? How much is it? Also, what is a margin call?

Answer 1

Interest is charged on the debit balance (the amount you owe) that is carried in the account.  

Margin debit is calculated on a daily bases but is charge monthly.

Most firms will charge their customers a rate that is based on the current call rate, and the rate varies depending on the debit balance - the larger the debit, the smaller the rate.

A margin call is when the account does not have the proper equity that is required to be carried in the account and the brokerage firm is requiring the customer to put up additional monies and/or securities.