How crypto-backed loans work
You deposit cryptocurrency with a lender as collateral and borrow money against it, usually only a fraction of the crypto's value. You get the crypto back once the loan is repaid.
Because crypto prices can fall sharply, the lender may ask you to add more collateral, or sell (liquidate) some or all of your crypto, if its value drops below a set level.
Worked example
Borrowing £10,000 at 10% over 12 months costs £879.16 a month, £10,549.91 in total.
Interest is worked out monthly at one twelfth of the annual rate. Lenders may calculate interest differently (some charge it daily), so your actual payments can differ slightly.
The risks
Crypto lending is high risk and often not covered by UK protections such as the Financial Services Compensation Scheme. If the lender fails, you could lose your collateral.
Inputs for the crypto loan calculator
Amount to borrow
The amount you want to borrow.
Interest rate (per year)
The annual interest rate on your loan. The rate shown is only an example, so enter the rate from your quote.
Term
How many months you'll repay over.
CALCULATOR QUESTIONS
Crypto loan calculator questions
How much can I borrow against crypto?
Usually only a fraction of the crypto's value, set by the lender.
What happens if the crypto price falls?
The lender may ask for more collateral or sell some of your crypto to cover the loan.
Is my crypto protected?
Often not. Crypto lending usually isn't covered by UK protections like the FSCS.
Does this include fees?
No. Some platforms charge fees on top of interest, so check the terms.