How to Calculate Loan Collateral?
Oftentimes, platform users experience difficulties in calculating the collateral amount for loan arrangements. Generally, crypto collateral coverage depends on loan amount, loan duration and it should meet the Initial LTV ratio (50%) at the date of striking the loan deal. The value of pledged collateral is directly contingent upon current exchange rate dynamics and correlations, hence it can either increase or decrease in due course.
LTV is calculated by the formula:
LTV = (Loan Amount + Interest)/Total Value of Collateral × 100.
However, the Initial LTV ratio can be personally adjusted when making your Loan Request – from 50% to 80%. Additionally, you can make use of online P2P Calculator, which can be easily located on the main LendaBit.com webpage. It is a handy instrument for automated calculations, which gives concise visuals to help determine all necessary variables, inclusive of collateral.
Below you will find illustrative examples how to conveniently determine the collateral amount.
NB! All collateral calculations are dependent on the current exchange rate, hence all numbers/quantitative indicators are relevant at the time of writing this blog article.
On LendaBit.com homepage, you can make use of P2P Loan Calculator. For instance, you want to apply for a 1000 USDT loan for debt consolidation. Enter the amount and click the preferred collateral currency (BTC or ETH). By default, loan term is set to 1 month (but you can adjust it in order of your preference). So, for a 1000 USDT loan, collateral will amount to 0.3201529 BTC or 11.64633982 ETH.
Log in to your LendaBit.com account.
Go to LoanBuilder and choose the Loan Wizard option.
Demonstratively, for a 250 USDT loan, the collateral amount in BTC will equal 0.08917984.
Likewise, the collateral amount in ETH will equal 3.24351349.
*Please keep in mind that it is recommended to maintain the Initial LTV ratio at 50% in view of significant crypto market fluctuations.
LendaBit Support May 21, 2019 at 2:04 pm
Please could you clarify your questions?
Alex June 1, 2019 at 11:37 am
Hello! I little bit don’t understand how your systems works: for example, I want to take loan 1000 usdt. In order to borrow these amount I must transfer collateral first.
What for to take loan @ 10% annual rate if I ALREADY have these money – for depositing collateral????
Alex Maznyi, Project Manager at LendaBit.com June 2, 2019 at 12:27 pm
Hope you are doing great.
Please, be kindly informed that it is not possible to take out a loan without collateral.
Loan service we provide is designated, primarily, for people owning crypto-assets. Basically, we give an option to “keep alive” the investment in crypto-currency when crypto-investor is in need of some funds and the opportunity we provide is to obtain a loan instead of selling crypto-assets.
Borrowing against your crypto, allows you to save potential gains from long-term holding it. If you would like to find out more on why collateral is important, welcome to our blog – https://lendabit.com/blog/importance-of-secured-loan-collateral/
Also, it should be noted that deposited collateral amount will be available for withdrawal when you repay the loan. Please, take into account that using our platform you can repay the loan at any moment suitable for you till the end of the loan term.
Moreover, we have provided a new feature recently which allows you as a borrower to reduce the collateral amount (from 50% up to 80% ratio) accordingly to personal preference.
So, using this feature you become a loan manager by regulating/adjusting collateral risk rates. You are welcome to do it by using the “Make a Loan Request” option.
If any questions arise, feel free to reach out for assistance via online chat, by email and phone +852 8198 0026, or request Customer care. And welcome to join us on Telegram.
PhanhuyVuong June 29, 2019 at 5:47 pm
Alex Maznyi, Project Manager at LendaBit.com June 30, 2019 at 2:26 pm
Hello Phanhuy Vuong,
Please, write to our support chat on site or in telegram channel(https://t.me/Lendabitcommunity) if you have any questions.
If it’s not convenient for you – describe your questions here (https://lendabit.com/support) and our support team will contact you.
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