6 minute read
Does MEXC Charge Interest on Leverage? What You Need to Know
from MEXC
by Exness_India
Yes, MEXC does charge interest on leverage when you trade using margin or futures. Whether you’re using cross margin or isolated margin, or trading perpetual futures, borrowing funds to increase your position size comes at a cost. That cost is typically in the form of interest (for margin trading) or a funding fee (for perpetual futures).
Let’s break it down clearly so you understand exactly how MEXC charges for leveraged trading, how much it costs, and what you should be aware of before taking leveraged positions.
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What Is Leverage on MEXC?
Leverage allows traders to control a larger position than they could with just their available capital. For example, using 10x leverage means you can open a $1,000 trade with just $100 of your own funds.
MEXC offers leverage through:
· Margin Trading (Spot + Borrowed Funds)
· Futures Trading (Perpetual Contracts with Leverage)
In both cases, MEXC provides you with borrowed funds or synthetic exposure to increase your position size. And in both cases, there's a cost.
Margin Trading on MEXC – Yes, There's Interest
When you use margin trading on MEXC, you're borrowing actual funds from the platform. This is similar to taking a loan to increase your buying power.
This type of borrowing incurs interest fees, which are calculated daily and added to your debt until you repay the borrowed amount.
How Interest Works in Margin Trading:
· MEXC charges hourly interest, compounded over time.
· The rate depends on the asset pair and current market conditions.
· You only pay interest on the borrowed amount, not your total position.
· Interest accrues continuously until the borrowed funds are returned.
Example:
If you borrow 1,000 USDT at a daily interest rate of 0.02%, you will pay 0.2 USDT per day in interest. If you hold the position for 10 days, that’s 2 USDT in interest.
The longer you hold a leveraged position, the more you pay. Margin trading is best for short- to mid-term trades, not for long-term investing.
Where to Check Interest Rates on MEXC?
MEXC displays current margin interest rates on the platform:
1. Go to "Trade" > "Margin".
2. Select the trading pair.
3. Look for the interest rate next to the borrowable assets.
4. Rates are typically shown as daily percentages.
These rates are not fixed. They vary depending on:
· Market supply/demand
· Volatility
· The asset you’re borrowing (some coins have higher risk and higher rates)
Make sure to check the real-time borrow rate before entering any margin position.
Does MEXC Charge Interest on Futures Leverage?
Not in the same way. MEXC futures don’t charge traditional “interest” like margin trading, because you aren’t actually borrowing assets from the exchange. Instead, MEXC uses a funding rate mechanism for perpetual futures contracts.
What Is a Funding Rate?
The funding rate is a recurring payment exchanged between long and short traders every 8 hours. It ensures the futures price stays close to the spot market price.
· If the funding rate is positive, longs pay shorts.
· If the funding rate is negative, shorts pay longs.
So while you're not paying “interest” to MEXC, you may end up paying or receiving funding fees, depending on your position and the market.
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When Are Funding Fees Charged?
· Every 8 hours (MEXC uses 3 funding times per day)
· Only if you hold a position during the funding time
· You can avoid paying or receiving funding if you close the position before the fee window
Where to Check Funding Rates on MEXC?
1. Go to the Futures section.
2. Choose your trading pair (e.g., BTC/USDT).
3. The funding rate and next settlement time are displayed near your position or in the “Funding Rate” tab.
Rates vary and can be positive or negative, depending on:
· Market sentiment
· Supply/demand imbalances between longs and shorts
How Much Can You Borrow with Leverage on MEXC?
MEXC offers different leverage limits depending on the trading mode:
· Margin Trading: Up to 10x leverage (some pairs less)
· Futures Trading: Up to 200x leverage (for BTC/USDT and some other major pairs)
Higher leverage = higher risk = greater potential losses. Interest or funding costs can also add up quickly if positions are left open too long.
Key Things to Know About Leverage Charges on MEXC
1. Interest is charged only in margin trading.
2. Funding rates apply only to futures trading.
3. Interest is based on borrowed amounts and accrues hourly.
4. Funding fees are not fixed and fluctuate with market conditions.
5. You can avoid funding fees in futures by closing before the funding time.
6. Interest in margin trading is unavoidable if you hold a borrowed position.
How to Reduce Leverage Costs on MEXC
If you want to trade with leverage but minimize your costs, here are a few tips:
1. Trade with a Plan
Only use leverage when you have a clear entry/exit strategy. Avoid holding leveraged positions overnight or for multiple days.
2. Monitor Interest & Funding Rates
Before opening a trade, check:
· The daily/hourly interest (margin)
· The current funding rate and countdown (futures)
Avoid entering positions just before high funding fees are due.
3. Use Isolated Margin
If you’re using margin trading, isolated margin limits your risk and borrowed amount to a single pair, helping manage costs and potential losses.
4. Close Positions Quickly
The longer your leveraged position is open, the more fees you'll pay. Quick trades = lower interest and less exposure to funding cycles.
5. Avoid High-Interest Pairs
Some altcoins or low-liquidity pairs have higher interest rates. Stick to major pairs like BTC/USDT or ETH/USDT to reduce interest charges.
What Happens If You Don’t Repay Borrowed Funds?
In margin trading, if your position goes against you and your margin ratio drops too low, MEXC may liquidate your position to recover the borrowed funds. This can result in losses greater than your initial capital, depending on the leverage used.
You are responsible for both the borrowed funds and the interest. Make sure to monitor your risk and use stop-loss orders if needed.
In futures, liquidation also happens when your margin falls below maintenance level, but there’s no borrowed asset—just the value of your contract exposure.
Final Answer: Does MEXC Charge Interest on Leverage?
Yes — but only in margin trading. If you're borrowing funds to increase your position size, you will pay interest on the borrowed amount.
If you're trading futures with leverage, you don’t pay interest to MEXC, but you may incur funding fees that are paid between traders every 8 hours.
Always check the latest interest and funding rates before opening leveraged positions. These fees, while sometimes small per hour, can add up quickly and eat into your profits — or amplify your losses.
Conclusion
Leverage can be a powerful tool on MEXC, but it comes with real financial costs. Whether you’re paying interest on margin loans or dealing with funding fees in futures, understanding the structure of these costs is critical for responsible trading.
Make sure you:
· Know how each type of leveraged product works
· Check real-time interest/funding rates
· Trade with a plan to minimize holding time and fee exposure
In short: Yes, MEXC charges interest on margin leverage, and funding fees may apply to futures — so plan accordingly.
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