margin lending

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Margin lending is a special type of lending, usually used to fund share purchases. A margin loan requires you to maintain a certain level of loan to valuation ratio (LVR) or be faced with a margin call (where the lender gives you notice to repay some of the loan). If margin calls are not met, the lender is typically allowed to sell your shares to repay the loan. Margin loans are a lot riskier for the borrower than most other types of borrowing used in our day to day lives.