With a non-recourse crypto loan, your collateral is the only thing securing the loan. If you don't repay, the lender keeps the collateral and you owe nothing more. Combined with no margin calls, it takes the market's swings out of your loan.
Recourse vs non-recourse
Most loans in the world are recourse loans. If the collateral doesn't cover what you owe, the lender can come after you personally for the difference: your other assets, your income, even through the courts.
A non-recourse loan limits the lender to the collateral. Whatever happens, the most you can lose is the collateral you pledged, and you keep the money you borrowed.
What "no margin calls" means
With a standard crypto loan, your loan-to-value ratio (LTV) rises when prices fall. Cross a threshold and you get a margin call: add collateral, repay part of the loan, or have your coins sold. In a sharp crash, that can happen within hours.
A loan with no margin calls is fixed from day one. If Bitcoin falls 40% the day after you borrow, nothing changes: you aren't asked to add collateral, none of your coins are sold, and your repayment stays exactly as agreed.
Side by side
| If this happens… | Standard crypto loan | Non-recourse, no margin calls |
|---|---|---|
| Price falls 30% | Margin call: add collateral or repay | Nothing changes |
| Price crashes 60% | Collateral may be sold at the low | Nothing changes |
| You choose not to repay | Collateral sold; you may still owe the rest | Collateral settles the loan; you owe nothing more |
| Price rises | Gain is yours when you repay | Gain is yours when you repay |
What to weigh
Because the lender carries the price risk, non-recourse loans usually have more conservative limits. Two things to keep in mind:
- Walking away has a cost. If you don't repay, you give up your collateral, which may by then be worth more than the loan. The loan is only "free" to walk away from when the collateral has fallen below what you borrowed.
- Read the agreement. Non-recourse terms should be written into your loan agreement, including what happens after a missed payment and any grace period.
How Helio loans work
Loans made by Helio Lending Pty Ltd are non-recourse, with no margin calls and fixed repayments. If a repayment is missed, there's a 120-hour grace period; after that, the collateral settles the loan and it's closed. See the full terms on our rates & fees page. Loans made by SALT through our partner program follow SALT's own terms.
See it in numbers
Our loan calculator shows your monthly interest, total cost and what happens if you walk away.
This article is general information, not financial, tax or legal advice.