BlockFi is a platform which you can use to borrow a loan using cryptocurrencies as collateral. BlockFi offers high interest rates and low cost on loans making it a suitable investment. BlockFi loans interest rate stands at 4.5% and you can borrow for your business or any other need. The loan scheme provides crypto accounts with a compound interest.
The company was founded by Zac Prince and launched in August 2017. It is located in New York, but it still retains its address in New Jersey.
Features of BlockFi Crypto Loan
The following are the main features of BlockFi loans.
- Cheap loans. When you borrow money through BlockFi, you will repay the loan with an interest of 4.5%. When you lock your crypto assets into your account, you get a credit equivalent to 50% of the value of your crypto assets.
- Fast loan application process. The process of applying for a loan with BlockFi is straightforward. BlockFi will then check if you meet their loan requirements and then respond in a few hours.
- No credit checks. BlockFi does not consider credit scores to determine your loan eligibility. On the other hand, getting a loan from BlockFi will not have an impact on your credit score.
- It can support different cryptocurrencies. BlockFi supports various crypto assets. Among them are Ethereum, bitcoin and Gemini Dollar. You can use them as collateral for the loan.
- Flexible repayment terms. The repayment terms of BlockFi are very flexible and are user-friendly. Once you receive US dollars into your account, you should pay the interest due to the loan every month. You can either use bitcoin or Ethereum.
- BlockFi loan calculator. BlockFi has a loan calculator that you can use to determine the value of the collateral that you need to obtain a loan.
- Pay interest first. When you borrow a BlockFi loan, the company requires you to pay the interest first and the make then pay the principal amount at the end.
- You can borrow money for anything. As long as you have collateral, you can borrow money for whatever purpose. You can then get a loan of up to 50% of the value of your crypto assets.
How BlockFi Works
One qualifies for a BlockFi loan equivalent to 50% of the value of crypto assets they hold. For example, if you lock 1 bitcoin at the market price of $8,000 for every bitcoin, then the maximum loan you can get is $4000. You can refinance the loan when it reaches its maturity date. Once you have borrowed the loan, you can do anything with the money. There are several benefits one can enjoy from borrowing cryptos instead of selling them.
The process of getting a loan is easy and straightforward.
- Create an account with BlockFi. Make sure to fill in all your details correctly.
- Once you have an account, click on the Loan tab. Then click Apply and fill in the KYC/AML verification. Fill in your details correctly.
- Review the information you just entered and then sign the agreement.
- Lock your collateral to BlockFi’s wallet.
- Wait as BlockFi verifies your request .
- Once you have passed the verification process, you will receive the loan in the form of the US dollar. The money will be deposited directly into your bank account through wire transfer.
- Then start paying interest every month either in USD, ETH, LTC or BTC.
- At the end of the repayment term, pay the principal amount. Alternatively, you can choose to refinance the loan.
BlockFi Loan Rates
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What Happens if You Don’t Repay the Loan?
It is important that you fulfill BlockFi loan repayment obligations. If you default to repay the loan, BlockFi gets full possession of cryptos equivalent to the loan that you used as collateral. BlockFi requires the borrower to lock up two times the value of the loan you are borrowing as collateral.
Is BlockFi Safe?
BlockFi is among the secure non-bank lending platforms offering loans in the US. You only need to back up your loan using crypto assets. Its services are available in 35 US states. BlockFi funds are held by Gemini, a licensed cryptocurrency exchange located in New York.
BlockFi loans are available in 47 states in the United States.
What you Need to Be Careful About
Getting a loan with BlockFi is easy and it can be the only option you have in times of financial need. However, watch out for the following.
- Low LTV ratio. You can only borrow a loan of up to 50% of the value of your cryptos.
- It is risky. The value of cryptocurrencies is not always guaranteed and they can drop at any time. In this happens, if you can repay the loan immediately, it would be better. However, you can back up the loan using other assets.
- Not available in all countries. In the US, it is not available in some states.