Everything You Want to Know About Bitcoin-Backed Loans

It is becoming easier to use bitcoin to meet different financial needs. Loans secured by bitcoin provide access to funds while allowing borrowers to keep their bitcoin without selling.

Bitcoin-backed loan terms and fees can be complicated, so it is important to understand how these loans work before borrowing.

This guide explains everything you might want to know about bitcoin-backed loans. It includes a comparison of leading bitcoin-backed loan options and their interest rates, loan-to-value ratios or limits, fees and key risks borrowers should understand before using bitcoin as collateral.

Bitcoin-backed loans explained: How they work and what to know

What is a bitcoin-backed loan?

A bitcoin-backed loan enables holders to borrow funds using bitcoin as collateral. The bitcoin is returned after they repay their loan.

Bitcoin-backed loans can provide liquidity without the sale of bitcoin. Selling bitcoin may trigger a taxable event in some situations or jurisdictions.

How does a bitcoin-backed loan work?

A bitcoin-backed loan gives borrowers the opportunity to use their bitcoin as collateral to access cash or, in some cases, stablecoins or other digital assets.

Borrowers deposit bitcoin with a loan provider directly or a designated third-party custodian. The loan provider issues a loan or line of credit based on the value of the collateral.

The bitcoin is returned after the borrower repays the loan’s principal and interest or closes the line of credit. If the price of bitcoin falls, the loan provider may require more bitcoin to be deposited, request partial repayment, or liquidate some or all of the collateral to repay the loan.

How do I repay a bitcoin-backed loan?

Borrowers need to repay their bitcoin-backed loan’s principal and interest with cash. Some bitcoin-backed loan providers may also accept payment in stablecoin or other digital assets.

What is the minimum credit score required for a bitcoin-backed loan?

Bitcoin-backed loan providers may review a holder’s credit history as part of the application process to confirm someone’s identity or approve the loan. Requirements vary. For example, some lenders require fair or good credit to get approved similar to traditional loans, such as a credit score of 620 or higher.

Bitcoin-backed loans: Leading loan providers, terms, fees, rates and options compared

Loan Provider	Interest Rate	Loan Size	Loan Terms	Loan-to-Value Ratio
Aven	7.99% to 11.99% APR	$1,000 to $1 million	Up to 10 years	Up to 70%
Arch Lending	8.49% to 11.84% APR	$5,000 to $10 million or more	1 year	Up to 60%
Figure	9.999% to 12.62% APR	$5,000 or more	1 year	Up to 75%
Ledn	9.99% to 11.49% APR	$500 to $1 million or more	1 year	50%
SALT	9.95% to 14.45% APR	$5,000 or more	1, 3 or 5 years	Up to 70%

Methodology: Rates, terms and loan product information were collected on April 7, 2026, from publicly available sources, including lender websites and other published materials.

Aven bitcoin-backed loan

Aven offers a bitcoin-backed line of credit with loan amounts from $1,000 to $1 million. Borrowers can access a loan-to-value ratio of up to 70%.

Aven also allows borrowers to convert a draw from the line of credit, such as a cash-out or balance transfer, into a plan with a fixed-rate and fixed-term of up to 10 years, longer than the terms common with many other bitcoin-backed loans. The company also offers interest-only fixed-term, fixed-rate plans with full principal payment due at maturity for up to five years. A fee applies for a cash-out or balance transfer.

Unlike many bitcoin-backed loan products, Aven does not require an immediate draw, such as a cash-out or balance transfer. This allows bitcoin holders to open and maintain the line of credit without obligation for added flexibility.

Aven’s interest rates vary based on the loan-to-value ratio selected when a borrower applies. APRs range from 7.99% to 11.99% for both fixed and variable rates.

Aven is one of the few bitcoin loan providers that does not charge an application fee. The company’s bitcoin-backed line of credit has a $0 origination fee.

Uniquely, Aven’s bitcoin-backed line of credit can be accessed through a credit card. The Aven Bitcoin Visa Card offers unlimited 2% cash back on purchases. (See cash back terms and conditions. Some restrictions apply.) Variable interest rates range from 7.99% to 11.99% APR.

Arch Lending bitcoin-backed loan

Arch Lending offers bitcoin-backed loans¹ with a minimum loan size of $5,000 and some of the largest loan sizes in the industry of $10 million or more. Borrowers can access a loan-to-value ratio of up to 60%. Loans have a one-year term.

Arch Lending’s interest rates vary based on the loan size, with higher rates for smaller loans. Most borrowers receive interest rates of 10% or 10.35% APR unless they take out a loan of more than $500,000. Overall, Arch Lending’s fixed APRs range from 8.49% for loans of more than $10 million to 11.84% for loans of $5,000 to $250,000.

Arch Lending charges an origination fee of 1.49% of the loan amount, which is deducted from the loan proceeds.

Figure bitcoin-backed loan

Figure offers bitcoin-backed loans¹ with a minimum loan size of $5,000. Borrowers can access a loan-to-value ratio of up to 75%, one of the highest limits among bitcoin-backed loans. Loans have a one-year term.

Figure’s interest rates vary based on the loan-to-value ratio. Fixed APRs range from 9.999% for a 50% loan-to-value ratio to 12.62% for loan-to-value ratios up to 75%.

Figure charges a 1% origination fee, which is capitalized in the loan amount.

Ledn bitcoin-backed loan

Ledn offers bitcoin-backed loans¹ from $500 to $1 million or more. Borrowers can access a loan-to-value ratio of 50%. Loans have a one-year term.

Ledn’s interest rates vary based on the loan size, with higher rates for smaller loans. Most borrowers receive interest rates of 11.49% APR unless they take out a loan of more than $250,000. Overall, Ledn’s fixed APRs range from 9.99% for loans of $1 million or more to 11.49% for loans under $250,000.

Ledn charges a 2% administrative fee at loan origination, but it may not apply in all jurisdictions. If charged, the fee will typically be deducted from the loan proceeds.

SALT bitcoin-backed loan

SALT offers bitcoin-backed loans¹ starting at $5,000. Borrowers can access a loan-to-value ratio of up to 70%. Loan terms can extend up to five years, longer than the one-year terms common with many bitcoin-backed loans.

SALT’s interest rates vary based on the loan-to-value ratio and loan term. Fixed APRs start at 9.95% for a loan-to-value ratio of 30% and increase to 14.45% for a loan-to-value ratio of 70%.

SALT charges a 1% origination fee, which is deducted from the loan proceeds.

Understanding bitcoin-backed loan rates and interest

How do bitcoin-backed loan rates work?

A bitcoin-backed loan’s interest rate is often determined by the loan-to-value ratio, the term or length of the loan, and other factors.

The interest rates on bitcoin-backed loans can be fixed, which stays the same over the term of the loan, or have a variable rate, which can change. Some bitcoin-loan providers, such as Aven, offer both fixed and variable rates.

What is a loan-to-value ratio for a bitcoin-backed loan?

A loan-to-value ratio is the percentage of the collateral’s value taken out as a loan. For example, if a borrower takes out a $30,000 loan and uses $100,000 worth of bitcoin as collateral, the loan-to-value ratio of their bitcoin-backed loan is 30%, or $30,000 divided by $100,000.

Bitcoin-backed loans typically offer lower interest rates for lower loan-to-value ratios. Loan providers generally view lower loan-to-value ratios as less risky because a lower loan-to-value ratio provides more protection to the lender if the price of bitcoin falls. The excess collateral can reduce the risk of liquidation or the sale of some or all of the collateral to repay the loan.

Can I refinance a bitcoin-backed loan?

Bitcoin-backed loans can be refinanced. Some loan providers may give borrowers the opportunity to lower their interest rate or adjust the terms of their existing bitcoin-backed loans by changing the loan-to-value ratio or extending the loan term.

Holders can also find another bitcoin-backed loan provider with a lower interest rate or more favorable terms to refinance their loan.

Key risks to understand about bitcoin-backed loans

What should I watch out for with bitcoin-backed loans?

Bitcoin-backed loan terms can vary widely. Some bitcoin-backed loan providers could require borrowers to use a proprietary wallet or hold a platform’s specific token. Other loans may offer introductory or step-up rates that increase the interest rate over time.

Bitcoin-backed loan providers can also charge costly fees. Common bitcoin-backed loan fees include annual or monthly fees, application or origination fees, custodian or platform fees, blockchain or network transaction fees, balance transfer fees, cash-out fees, and collateral withdrawal fees.

Some bitcoin-backed loan providers may also charge penalties, including late payment fees, prepayment penalties, or liquidation fees. These charges can increase the overall cost of borrowing.

Is my bitcoin safe with a bitcoin-backed loan provider?

Bitcoin used as collateral for a bitcoin-backed loan is usually held in custody by the loan provider or a third-party custodian or specialized partner with security controls, such as multi-signature wallets or cold storage.

Security practices vary by loan provider and custodian. Borrowers should understand how their bitcoin is stored before applying for a bitcoin-backed loan and whether the designated custodian is regulated and insured.

Can a bitcoin-backed loan provider lend out my collateral during my loan?

Some bitcoin-backed loan providers use a borrower’s bitcoin as collateral to secure their own loans or an affiliated exchange’s trading positions. This is called rehypothecation.

Rehypothecation is risky. If the bitcoin-backed loan provider defaults or becomes insolvent, borrowers might have a hard time recovering their collateral and, in rare cases, could lose it entirely.

Borrowers should understand how their bitcoin collateral is managed. Some bitcoin-backed loan providers, such as Aven, do not repledge customer collateral or assets. Other institutions allow borrowers to opt out of having their collateral used in rehypothecation.

Holders may want to look for a bitcoin-backed loan provider that partners with a third-party custodian or offers segregated accounts, where borrower assets are kept separately from the company’s funds, if they are concerned about rehypothecation.

Can I lose my bitcoin with a bitcoin-backed loan?

Borrowers can lose some or all of their bitcoin if they do not repay their loan or if the loan-to-value ratio increases because the price of bitcoin falls. The loan-to-value ratio may also get too high with a bitcoin-backed line of credit because of borrowing or spending habits.

Bitcoin-backed loan providers typically try to notify borrowers if the loan-to-value ratio reaches a warning level or other threshold. If the borrower does not add more bitcoin or repay part of their loan to bring down the loan-to-value ratio within a certain period, the loan provider may issue a margin call or liquidate some or all of the bitcoin. Liquidation may occur without notice because of the volatile nature of bitcoin and other digital assets.

Aven Bitcoin Card is a variable rate revolving line of credit with fixed-rate, fixed-term plans, or interest-only plans for certain applicants, each with its own annual percentage rate (“APR”). APR is the cost of credit as a yearly rate and does not include costs other than interest. The variable APR for the revolving line of credit is based on the prime rate published by the Wall Street Journal in its Money Rates section (“Index”) plus a margin. The margin is determined based on multiple factors, including the loan-to-value ratio you select at the time of account creation. The Index as of April 20, 2026, was 6.75%. The APR will not exceed 14.99%. The fixed APR for a fixed-term loan (aka Aven Simple Loan) is based on your variable APR and other factors, including the loan-to-value ratio you select at the time of account creation. The APR for either of these plans are fixed for the term of the plan. For cash outs and balance transfers, there is a 1% fee on the amount transferred.

¹ Interest rates, loan-to-value ratios, repayment terms, fees, eligibility requirements, and other terms may change at any time without notice. The information in this article reflects what was publicly available on April 7, 2026, and may not reflect current offers. Review each loan provider’s website or loan agreement for the latest loan terms and offers.

Aven Visa credit cards are issued by Coastal Community Bank pursuant to a license from Visa U.S.A. Inc. Aven (NMLS #2042345) accounts are held by Coastal Community Bank, Member FDIC. Equal Housing Lender. NMLS #462289. Learn more at www.aven.com.

Coastal Community Bank is not the issuer or custodian of bitcoin. Bitcoin is not FDIC insured.

The price of bitcoin can change. Bitcoin-backed loans carry risks, including the potential for liquidation if collateral values change because of market volatility.

All company names mentioned are the property of their respective owners.