How do crypto-backed loans work?
Choose the collateral amount and cryptocurrency, for example, BTC — it will remain with us until the loan is repaid or liquidated.
Choose the loan term and amount in USDT.
Confirm the loan and transfer the collateral to the EMCD wallet to receive the USDT.
Close the crypto loan at any time — just return the USDT with interest to get your collateral back.
What is LTV?
LTV is the percentage of your collateral’s value that you can borrow in USDT.
For example, if BTC is worth $100,000, with an LTV of 50%, you can get a loan of 50,000 USDT. The lower the LTV, the lower the risk of liquidation.
What is liquidation?
Liquidation (or liquidation price) is the collateral value at which we close the loan. This happens when your LTV exceeds 95% — in that case, we use the collateral to repay the loan. You can avoid this by adding more collateral or partially repaying the loan on time.
For example, you took out a loan of 50,000 USDT and put up 1 BTC, which is worth 100,000 USDT, as a collateral. In this case, your LTV is 50%.
If the price of BTC drops, the LTV increases. When it reaches 95%, which happens at a BTC price of around 52,632 USDT, liquidation is triggered, and we’ll sell the collateral to repay your loan.
How long does it take to receive the loan? And when will I get my collateral back?
You can get a loan in 15 minutes. Collateral is returned within an hour after the loan is repaid.
What happens if the collateral's exchange rate changes after I receive the loan?
If the collateral price goes up, the LTV decreases, and the risk of liquidation goes down. You can close the loan and sell the collateral at a higher price to lock in a profit.
If the collateral price drops, the LTV increases. If it exceeds 95%, the loan will be liquidated. To lower the risk, you can either add more collateral or partially repay the loan.
What happens when I partially repay a loan?
When you partially repay your crypto loan, the accrued interest is paid off first, and the remaining amount goes toward reducing the loan principal. This lowers the amount that future interest is calculated on, reduces your overall debt, and also decreases your LTV. As a result, the risk of liquidation goes down, and your loan terms become more manageable.
Let’s say the price of BTC is 100,000 USDT. You use 0.2 BTC as collateral and take out a loan for 10,000 USDT. That gives you an initial LTV of 50%. The loan interest rate is 15% annually, or approximately 0.0411% per day.
Each day, interest of 4.11 USDT accrues. After 10 days, it totals 41.10 USDT. Your total debt increases to 10,041.10 USDT. Since the collateral remains the same, your LTV increases to 50.21%.
You decide to make a partial repayment of 200 USDT. First, the 41.10 USDT in interest is paid off. The remaining 158.90 USDT is applied to the loan principal. Your new loan principal is 9,841.10 USDT, so interest will now accrue on that amount — about 4.05 USDT per day. After the partial repayment, your LTV drops to 49.21%, reducing the risk of your loan liquidation.
Where do we get our cryptocurrency exchange rates from?
We use the average rate from 5 major exchanges like Binance and Huobi. Rates update every few seconds to reflect real-time market changes.
All or part of the EMCD services, some features thereof, or some digital assets, are not available in certain jurisdictions, including where restrictions or limitations may apply, as indicated on the EMCD Personal Account and in the relevant general terms and conditions.