A loan’s LTV (loan-to-value) ratio determines the amount of crypto collateral you need to post in order to take out a loan. This number only applies when you’re getting a collateralized loan. These types of loans require clients to give the lender an asset, in our case digital currency, to hold until their loan is paid off.
Why Do I Need to Stake Collateral for My Loan?
The main reason people need to stake collateral is for limiting risk. For the client, it can be easier to obtain a loan when you offer collateral in return. By staking collateral, you typically have access to more funding at better rates and don’t have to sell your assets to raise cash. It also makes it easier to get a loan overall.
For the lender, taking collateral provides peace of mind. When Bitleague lends money, we need to be confident that our clients will repay their loans. If we hold collateral, we lower our risk of repayment issues. More importantly, it allows us to offer clients some of the most competitive rates in the market.
Bitleague Crypto LTV Ratio
Bitleague’s collateralized loans involve clients staking their crypto assets as collateral in order to borrow USD. We currently support collateral posted in Bitcoin.
With respect to the collateral, our borrower will be required, at all times, maintain a loan to value ratio, where the outstanding principal balance of the Loan is calculated as the percentage of the market value of the Collateral (The market value is decided as either the average of the prices of Coinbase Pro, Bitstamp, Bittrex, Kraken website, or the market value determined by Lender in its reasonable discretion).
LTV ratio = outstanding principal balance / market value of the Collateral
Bitleague offers LTVs up to 60%. That number is based on a proven model to limit our exposure to risk and our client’s likelihood of hitting a trigger event.
A “Trigger Event” happens when the value of your collateral decreases outside of a safe range. Upon notice by Lender to Borrower of the occurrence of a Trigger Event, the client has 48 hours to post additional collateral to bring the LTV back within a healthy range. Clients can also pay down their loan balance to fix the issue. If no action is taken, Bitleague will liquidate a portion of the collateral to lower the LTV back into the safe zone.
Benefits of a Bitleague Loan
Our clients typically have short term funding needs but also see the value of their cryptocurrencies going up in the long term. Selling your crypto can also trigger tax consequences, making that option less desirable. As a result, some people are not interested in selling their Bitcoin (BTC) to meet their financial goals. Instead, they will borrow against their crypto to get USD with Bitleague.
Our clients use their loan for a number of things. Some of our clients are first time home buyers. A Bitleague loan is a great way to fund a down payment on a real estate property. Other clients are small business owners and need an option for funding their business. Bitleague is also a great option for people looking to fund payroll or other business expenses. We even have clients that use Bitleague loans to fund their lifestyle. Travelling can be expensive, but accessing the value of your long-term crypto investments opens the door to finally booking that trip around the world you’ve been planning.
How Can You Get a Bitleague Loan?
You can apply for a crypto loan. After applying, you will receive a decision from our team within 1 business day. Bitleague clients often go from application-to-funding in as few as 90 minutes.
If you have any questions about Bitleague or how our loans work, please contact us at email@example.com. We love hearing from you.