How Does a Crypto-Backed Loan Work?
A straightforward overview of borrowing against your digital assets.
Updated
Choose Your Loan Terms
Start by selecting the amount you want to borrow, the length of the loan, and the digital assets you plan to use as collateral. Arvexo offers loans from $5,000, with terms from 1 to 48 months.
Your available loan amount depends on the value and type of collateral provided, as well as your eligibility following review.
Provide Collateral
Your crypto is pledged as security for the loan. The amount required is determined by the loan-to-value ratio, or LTV.
LTV compares your loan amount to the value of your collateral. For example, borrowing $50,000 against $100,000 in collateral creates a 50% LTV.
A lower starting LTV generally provides more room for market movement. Because digital asset prices can change quickly, this is an important part of structuring a loan responsibly.
Review and Final Terms
After you submit a request, Arvexo reviews the information provided and completes any required verification. If approved, you receive the final loan terms, including the amount, repayment schedule, and collateral requirements.
Any estimate shown before this stage is illustrative only. Final terms depend on eligibility, review, and market conditions.
Receive Funds and Manage Your Loan
Once the agreed collateral requirement is met, the loan funds are made available according to your final terms.
During the loan term, you can monitor your balance, repayments, collateral value, and LTV through your account. Keeping an eye on loan health is especially important when markets are volatile.
Repay and Release Your Collateral
When the loan balance, interest, and any applicable fees are fully repaid, your collateral is released.
If the value of your collateral falls and your LTV reaches a specified threshold, you may need to add collateral or reduce your outstanding balance. If the position is not restored, part or all of the collateral may be liquidated to meet the loan obligations.
Important to Know
Crypto-backed borrowing can provide flexibility, but it also involves risk. Before applying, make sure you understand the repayment terms, LTV requirements, and potential impact of market volatility.
This article is for general information only and does not constitute financial, investment, legal, or tax advice. Loan availability and final terms are subject to eligibility, review, and market conditions. Digital assets are volatile, and collateral may be liquidated if applicable LTV thresholds are breached.
