A Dollar Loan from Ledn allows you to borrow funds against your Bitcoin (BTC) or Ethereum (ETH) without selling your digital assets. This means you can keep your digital assets intact while accessing liquidity in USD or USDC.
To qualify for a Dollar Loan, you only need to have a minimum of $1,000 USD worth of eligible digital assets in your Transaction account to be used as collateral. Alternatively, you can send the collateral from an external source.
Please note that in some eligible regions, loans may be subject to minimum principal requirements or require confirmation of commercial purpose.
How It Works:
- Collateral & Loan-to-Value (LTV): Loans are typically issued at a 50% LTV. For example, if your BTC or ETH is worth $10,000, you can borrow up to $5,000.
- Interest Rates Fees & Terms:
- Loans have a standard 12-month term, with flexible repayment options.
- No Prepayment Penalties: You can repay your loan early without incurring extra charges.
- Interest Calculation: Interest on Ledn Loans accrues on a daily basis. Interest rates vary based on your loan type (Standard vs. Custodied) and jurisdiction.
- Interest Payments: Interest payments and any applicable fees are not due until the loan is closed.
- Admin Fees: There is a 2% administrative charge at Loan origination. Admin fees are not applicable to clients residing in Canada and the United States.
Collateral Management Options:
-
-
- Standard Loans: For these loans, Ledn has the right to lend the collateral to institutions to earn interest, which in turn, Ledn uses to lower the interest rate of these Standard loans.
- Custodied Loans: The collateral you post to secure your loan may only be re-posted by Ledn to a trusted institutional USD funding partner, such as a bank, credit fund or other corporate funding partner. Collateral is held securely in segregated and verifiable on-chain addresses, ensuring that the collateral is legally ring-fenced from a funding partner’s assets and protected even in the unlikely bankruptcy of our funding partner. Collateral is held securely in custody throughout the loan. Neither Ledn nor the institutional partner has the right to lend out your collateral to generate interest. The interest rate for these loans will be higher than Standard Loans and reflect the fact that the Custodied Loan collateral is ring-fenced from any credit risk related to rehypothecation or lending activities relating to Standard Loans and Ledn Growth accounts.
-
Key Benefits:
- Quick loan disbursement, typically within 24 hours of receiving collateral.
- No early prepayment penalties and no payments until your loan is closed.
- Flexible repayment in BTC, ETH, USDC, or via wire transfer.