Payments and collateral

Payments

When do I need to repay my loan?

You’ll need to pay the interest on your loan every month and repay the principal within 12 months of the date of your first payment.

Which payment methods can I use to make my monthly payments?

Bank account (ACH)

You can use the bank account associated with your Coinbase account. Because ACH processing takes 3-5 business days, we recommend you pay between the 1st and 10th of each month to avoid a late payment and the sale of your BTC collateral. 

If you’d like to add a new bank account to receive your loan or to make your payments, please be aware that verifying new bank information may take a few days. 

Cash (US dollars)

If you have sufficient funds available to cover your monthly loan payment, you can use cash in your Coinbase account to make an immediate payment.

Learn about adding USD funds to your Coinbase account.

When is my loan payment due?

If you’re using a bank account for payment, we highly recommend that you make your monthly payments between the 1st and by the 10th each month to avoid late payment and the sale of your BTC collateral, since banks can take 3-5 business to process your transaction. Payments made through your linked USD wallet are instant. 

If payment isn’t received by the 15th, Coinbase will sell just enough of your BTC collateral to cover the missed payment, plus 2% of the total transaction. You can review your loan agreement for more details.

Although your monthly payments are due on the 10th of each month, your first payment will be due no less than 30 days after your loan is approved. For example, if you’ve taken out a loan on March 17th, your first payment wouldn’t be due on the 10th of the next month (April) since that would be within 30 days from the date the loan was approved. Instead, your first payment would be due on the 10th of May. 

Early payment

Payments received before the 1st of each month will be applied to the principal loan amount, and not the monthly interest due. There is no penalty fee for early payments.

Paying off your principal balance earlier than the loan schedule will result in lower interest payable overall. 

Additional fees

In the case that your loan health falls below 40%, Coinbase will sell just enough of your BTC collateral to bring your loan health to 50%, plus 2% of the total transaction. You can review your loan agreement for details.

Manner of payment

Monthly interest payments can be made by signing into your Coinbase account through a computer or your Coinbase app (iOS only) using either the bank account associated with your Coinbase account, or cash from your USD wallet.  

Where can I find details about my loan terms? 

You can download your loan agreement under Loan statements and agreement after you’ve signed into https://www.coinbase.com/borrow

Once you’re signed in:

iOS

Scroll down and tap Loan statements and agreements.

Computer  

Click Loan statements and agreements on the right menu.

Android  

Viewing and managing your loan is not yet available in the Android app.

When and how will I receive my funds?

Your bank account

You can use your linked bank account to receive the funds through ACH. Depending on your bank, funds can typically be available within 1-3 business days.

Learn how to link a bank account.  

Your PayPal

You can choose PayPal to receive your funds for loans up to $10,000, which are funded immediately. 

Note: You can only pay back your loan using your linked bank account or USD balance.

How is interest calculated and accrued? 

Interest is accrued daily based on the daily interest rate (calculated as 8% APR divided by 366) and the outstanding principal amount on your loan. On the 1st of each month, the accrued interest from the prior month is charged to your account. 

Any amount paid before the 1st of each month will be automatically applied to the principal loan amount, which will in turn lower your interest payments overall. 

BTC collateral

What is collateral?

Collateral is the Bitcoin (BTC) in your Coinbase account that is backing your loan. When you borrow from Coinbase, the required BTC collateral amount is moved from your BTC wallet to a collateral wallet.  BTC collateral can’t be removed from your collateral wallet until the loan is paid off in full, which you have 12 months to repay.

Only BTC can be counted as collateral towards your loan. No other cryptocurrency is eligible to be used as collateral.

You can add to your collateral wallet at any time by visiting the Borrow homepage and selecting Add collateral. If you have BTC in an external wallet, you can transfer it to Coinbase and then add it to the collateral wallet via the same steps.

Note: Coinbase holds this BTC until the loan is fully repaid, and may use some of the BTC to recoup amounts payable under your loan agreement in the event that your loan health falls below 40%, or you miss a payment.

When do I need to add collateral?

If your loan health falls below 40%, you’ll typically have 72 hours to add BTC collateral or make a payment. In the rare case that your loan health falls below 15% (where the value of BTC drops dramatically), Coinbase will sell off just enough of your BTC collateral to bring your loan health back to 50%, plus 2% of the total transaction, without prior notice. We’ll notify you via email and in-app (when available) if this occurs.

In what event will my BTC collateral be sold off?  

Some of your collateral may be sold off in the three scenarios below:

  1. If your loan health drops below 40%, you typically have 72 hours to add more BTC collateral or make a payment towards principal to bring your health back to 50%. If you take no action, Coinbase may sell off some of your collateral to bring loan health back to 50% plus 2% of the total transaction.

  2. In the rare case that your loan health falls rapidly to below 15%, Coinbase may sell off your collateral to bring you back to 50% without prior notice plus 2% of the total transaction

  3. If we haven’t received payment by the 15th, Coinbase will sell off enough of your collateral to cover the due amount plus 2% of the total transaction. Exception: if the 15th is less than 30 days from the date of your loan origination.

In the rare event that there is insufficient BTC collateral in your account to repay your loan, Coinbase may also sell any other cryptocurrency held in your Coinbase wallet. Please review your loan agreement for further details. 

Learn about loan health.

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