Calculate loan margin, total equity amount, or margin percentage borrowed by entering any two values and finding the missing amount.
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Loan Margin Formula
The loan margin calculator uses the relationship between total equity, the margin percentage borrowed, and the resulting loan margin amount.
- LM = loan margin, in dollars
- TE = total equity amount, in dollars
- MP = margin percentage borrowed for the loan, as a percent
If you enter the total equity amount and the margin percentage, the calculator finds the loan margin in dollars. If you enter the loan margin and margin percentage, it finds the total equity amount needed to support that margin. If you enter the loan margin and total equity amount, it finds the percentage of equity being borrowed.
Margin Percentage and Loan Amount Reference
The table below shows how different margin percentages affect the dollar amount borrowed from a given equity amount.
| Total Equity | Margin Percentage | Loan Margin |
|---|---|---|
| $10,000 | 25% | $2,500 |
| $10,000 | 50% | $5,000 |
| $25,000 | 40% | $10,000 |
| $50,000 | 60% | $30,000 |
Example Calculations
Example 1: Calculate loan margin
You have $20,000 in total equity and borrow 35% of it as a loan margin.
The loan margin is $7,000.
Example 2: Calculate margin percentage
You have $30,000 in total equity and a loan margin of $12,000.
The margin percentage borrowed is 40%.
FAQ
What does loan margin mean?
Loan margin is the dollar amount borrowed against a total equity amount. For example, if you have $50,000 in equity and borrow 30% of it, the loan margin is $15,000.
How do you calculate the margin percentage borrowed?
Divide the loan margin by the total equity amount, then multiply by 100. For example, a $5,000 loan margin on $20,000 of equity is 25% because 5,000 divided by 20,000 equals 0.25, and 0.25 times 100 equals 25%.
Can the margin percentage be more than 100%?
Mathematically, yes. A margin percentage over 100% means the loan margin is greater than the total equity amount. In practical lending, that may not be allowed depending on the loan terms, collateral rules, and lender requirements.
