Crypto loans have emerged as among the easiest wayto leverage your digital assets and turn them into real-world spending power. But before you go and look for a loan service provider, it is important to understand how these loans are paid back.
Repaying a crypto-backed loan is often a much smoother process than traditional bank loans. This blog post will guide you through everything you need to know, including repayment options, processing times, flexibility, and the benefits of using APX Lending for your crypto-backed loan needs.
One of the major benefits of crypto-backed loans compared to traditional loans is their flexibility. APX Lending as a leading compliant crypto-backed lending platform, understands market volatility and that financial situations can change, and offers a borrower-friendly approach to repayment with the following benefits:
Traditional loans often penalize borrowers for early repayment. This can be frustrating if you want to settle your loan ahead of schedule. We don't impose any prepayment fees, so you can pay off your loan early and save money on interest charges by shortening your loan term at any point in time!
APX Lending empowers you to manage your entire loan repayment process conveniently online. Our secure online platform allows you to easily track your loan status, make payments at your own pace, and manage your account information 24/7 from any device with an internet connection. This simplifies loan management and offers greater control over your finances. All we ask is that you make your monthly minimum interest payments on time!
Understanding your repayment obligations is crucial before taking out any loan. Crypto loan calculators are powerful tools that can help you navigate this aspect of crypto loans at APX Lending. These calculators are designed to take the guesswork out of repayments by factoring in key loan details and the impact of cryptocurrency's inherent market volatility:
By inputting these details into the APX Lending loan calculator available on www.apxlending.com, you can receive an estimated breakdown of the amount you will be able to borrow, your monthly payments or the total interest your loan will cost you. Remember that these tools provide estimates.
Most crypto loan platforms, including APX Lending, typically use a simple interest structure. This means you only pay interest over a set outstanding loan balance. Furthermore, if you decide to prepay a portion of your loan mid-way through, you’ll only be charged interest on the remaining portion.
APX Lending offers competitive interest rates, as low as 11.99%, flexible loan terms for short-term needs or long-term investments, and a transparent fee structure with no hidden costs. This empowers you to make informed decisions and get the most value of your crypto loan without sacrificing returns to excessive fees or without having to sell your crypto holdings.
Security is paramount when dealing with cryptocurrencies. APX Lending prioritizes robust security measures to ensure your crypto asset collateral is safe throughout the tenure of your loan. We store your crypto collateral with licensed, and insured crypto custodians in segregated, multi-sig cold storage wallets. APX Lending also undergoes regular security audits to identify and address any potential vulnerabilities that may arise.
If you don't repay your crypto loan, there are several consequences that you can expect. This includes the ability of the lender, in our case APX Lending, to liquidate some or all of your collateral (depending on how much you owe).
Liquidation of your collateral. When you take out a crypto-backed loan, you provide crypto as collateral. You deposit this crypto collateral with the lender, in our case APX Lending. If the value of the crypto collateral drops below a certain point (known as the liquidation price), the lender can sell your collateral back to recoup their losses. The liquidation price is set as a percentage of the loan value.APX Lending provides our borrowers with the highest Liquidation LTVs on the market at 95%. This gives you the most flexibility and the ability to “ride out” drops in crypto prices. For example, if you took out a $70,000 loan using $100,000 worth of collateral, the value of your collateral would have to drop down to approximately $74,000 before it is liquidated to pay back the loan. You have many options, such as sending more collateral or paying back some of your loan, to avoid loan liquidations. For more information read our blog What Happens if You Default on a Crypto Loan?
The tax implications of cryptocurrency-backed loans can be complex. We recommend you consult with a tax professional for specific tax advice whenever you are looking for a crypto-backed loan.
In some cases, the interest paid on a crypto loan may be tax-deductible if the loan was used for investment purposes. However, this can vary depending on the jurisdiction and specific circumstances.
In general, interest paid on loans is typically tax-deductible, but it ultimately depends on the purpose of the loan and how the borrowed funds are used. It's important to keep detailed records of your cryptocurrency transactions and loan agreements to ensure accurate reporting to the Internal Revenue Agency (IRA) in the US and Canada Revenue Agency (CRA) in Canada.
Unlike traditional bank deposits, crypto loans are generally not insured. However, some platforms, including APX Lending offer other forms of insurance and custody of your collateral with licensed custodians that offer up to $250M of insurance coverage.
By understanding the repayment terms and the benefits offered by APX Lending, you can confidently leverage crypto-backed loans to achieve your financial goals in Canada and the U.S. Remember, this article provides a general overview, and you should always refer to the specific terms and conditions outlined by APX Lending before entering into any loan agreement.
APX Lending is a registered and compliant crypto-backed lender operating in the US, Canada, and globally. APX Lending does not offer financial or tax advice. We strongly encourage you to consult with a certified financial or tax professional for guidance on any related inquiries you may have.
