Crypto Lending Guidelines and FAQ’s

Crypto loans are typically 6 to 12 months in term length. Some vendors offer an option to refinance for another term. These are short term options used to improve their purchase power by being a cash option and able to move quickly in today’s market.

Must have the most common Crypto as Listed Below:
(Some other coins may be used, but only on a case-by-case basis)
Bitcoin
Ethereum
Litecoin
XRP
Bitcoin Cash

LVR’s (Loan to Value Ratios) vary between 35% to 70%, with 50% percent being the most recommended and common. Not all lenders offer all the options. Some only offer 35% and 50%. It depends on the price range. This also determines interest rate on the loans. Interest rates range from 4% – 13%, again, depending on size of loan and LVR.

1. Buyer has crypto to leverage and interested in exploring the short-term option to become a cash buyer.
2. Buyer schedules a one-on-one live call with representative to gather information and talk through the process.
3. All the information is sent to underwriting to determine best loan options in the market today.
4. Once the lender is found (usually within 24 hours), we talk through the basic terms and conditions, LVR rates available through that lender, and type of loan. Once buyer agrees,
5. Set up a meeting with the main underwriter for the lending company to go over terms, and a bit of KYC (know your customer). This can take approx. 10-15 min.
6. Once the terms are agreed upon and a contract and rate sheet are provided, the crypto transfer from wallet to wallet takes place. The cash is then transferred to individual bank account or wherever funds need to be sent. This happens while on the phone, length of time depends on bank. This can be immediate or take 6-12 hours. 

After the successful fiat transfer, the buyer now has the cash to purchase their property. 

Once the property is secured and owned, the buyer then goes and finds a more traditional lending option on the property, uses the funds to pay back the crypto loan, and the crypto is returned to their wallet. 

We can handle loans from $100,000 to $70M. The larger loans are more complicated and take a bit more time (maybe a week). 

1. When you borrow from a bank, getting approval for a loan can take a few days or even a few weeks. With cryptocurrency lending, most of the platforms will approve a loan within 24 hours. ID verification is usually required, but as long as you have cryptocurrency (or sometimes fiat currency) that you can deposit as collateral and government-issued ID readily available, eligibility is guaranteed. 
2. The fee structures in crypto lending are clear-cut, plus they are typically lower than what you will find in traditional banking. More often than not, there is a one-time service fee, but that is all. Moreover, if you need to be paid in a different currency, you won’t be comforted with outrageous exchange rates. 
3. You can access the value of your crypto ― that is, you can get a loan in US dollars or stable coin; 
4. You do not have to pay any capital gains tax that you would have to pay if you sold your crypto; 
5. You still own your crypto; 
6. You still benefit from at least some of any rise in the value of your crypto, 
7. You are protected against at least some of any fall in the value of your crypto 
8. No credit checks. 

All lenders have different options for lending. The most common are under $1M and can be subject to margin lending. The triggers are different per loans but can be between 10% and 20% drop in price, with 24 hours to top up. The client is spoken to directly in this case and funds are not moved without any knowledge. Therefore we recommend 50% LVR as the underlying asset is protected the absolute most and margin lending is not a worry. 

Rehypothecation – we do not use lenders who sell crypto to 3rd parties while a legal contract is still in place. If a loan is defaulted on, then the company can sell of the coin to pay the loan plus interest. 

Put And Call – mostly for $1M and above lending and by far the most sought after. This offers cold storage, no margin calls and a 6-month strategy, which can be rolled over if needed. This is more of a collar loan set forth at the beginning of the loan. The buyer can set the LVR up front anywhere from 40% to 70%. For this lender This option, the individual buyer needs to have $3M in assets with proof or be an accredited investment company with $1M is assets. 

Register below to get in touch and find out more about our lending options.