How to borrow money against your crypto in 4 simple steps
Going long on crypto can mean being short on cash. Whether your car breaks down or your boiler packs up, life doesn’t give a damn about your investment strategy. At times like these, selling might seem your only way out.
But instead of selling up, you can borrow against your crypto for as little as 6% APR (as of 20 October 2020) through our P2P lending platform. And once you repay, you get your crypto back. That way, you get the money you need without losing the potential uplift of your tokens.
Step #1 — Create your borrow order
First, create your borrow order. We’ll use this to match you with a suitable investor. To begin, head to our website and click Borrow to the right of the middle on the top of the screen and you’ll see the screen below.
- How much to borrow. There are no maximum limits, but the minimum is $50.
- Your collateral. We accept over 70+ different cryptocurrency tokens, and you need to put up 150% of the loan value in your chosen token.
- The wallet to return your collateral. Please enter the correct address so we can return your collateral when you repay.
- The currency. Currently, you can borrow US Dollars or crypto, such as Binance (BNC), Bitcoin (BTC), Ripple (XRP), DIA (DIA), and many more.
- The length of term. Choose a term that’s comfortable for you — give yourself plenty of time to repay.
A matching fee and collateral devaluation
There is a 3.5% fee to match you with a lender that’s paid upfront. This helps us maintain and develop the platform, attract new customers (so you always find a match), and build partnerships with other promising blockchain projects that add value to your experience.
It’s important to note that if the value of you crypto collateral falls during your loan period, it will be liquidated. We’ll notify you via email when your collateral falls to 125%, 120%, and 115% of the value, so that you have ample warning to top-up. There are two ways to top up your collateral:
- For isolated loans, go to your Accounts page and click the Top-up button under Loan Details.
- For multi-collateral loans, top-up at the coin balance page (seen below). Click Deposit to send more cryptocurrency to your Available balance. Then, you can click Top-up to move the token from your Available balance to your Collateral balance.
Once you’ve selected the details for your loan, click Borrow cash.
Please note that as of March 29, 2021, payment via ACH is suspended until further notice. use Zelle or wire when transferring your funds.
Creating a borrow order when you already have collateral on MyConstant
If you have collateral on your account, you can borrow up to or less than the credit amount available to your account.
Simply enter the amount that you want to borrow. Go to the bottom of the box and click ‘borrow now.’ Remember, you don’t need to enter anything in the ‘collateral required’ or ‘loan boxes.’
Step #2 — Send your collateral to escrow
You will now see the screen below. This is the escrow address to which you should send your collateral. Either copy the address or scan the QR code using a mobile wallet app.
Either copy the address or scan the QR code to send your collateral:
Please send your collateral within 60 minutes. After that, your order will expire (you can easily recreate it). This is a security measure that protects the integrity of the platform and ensures we can service orders on time.
Once the collateral is in escrow, the platform will search for a lender. You can check the progress of your order on your Accounts page. Your loan orders are listed on the right-hand side, and on the top right, you can check the status.
- Pending means we’re awaiting your collateral.
- Matched means your term has begun and your money is in your account.
- Expired means we didn’t receive your collateral in time.
- Closed means you cancelled the order before matching, or you’ve repaid the loan.
During the loan term, you can also:
- Recall excess collateral if its value has risen.
- Top up collateral if the value falls close to the liquidation threshold.
- Repay early — but you’ll have to pay 50% of the total interest due if you repay before 75% of the loan term is up. You will need to repay all of the interest due if you repay after 75% of the term.
Step #3 — Withdraw your loan
Once matched, you can withdraw your loan in fiat (USD) or crypto (Stablecoin). Head to your Accounts page and you’ll see the buttons below.
Manage your loans from the Accounts page:
To withdraw cash, click Withdraw fiat. You’ll then see the screen below.
Withdraw quickly and easily using Zelle.
Zelle is a US-based digital payments network similar to Venmo. It’s terrific for sending small amounts of money ($1,000 or less).
You can also withdraw your loan via ACH.
ACH stands for Automated Clearing House. It’s similar to a wire transfer. The main difference is that it’s free and it can take up to 5 business days to reach your account.
For a detailed explanation of how to withdraw using Zelle or ACH have a look at this blog.
Enter the amount, payment method, and recipient details — this will be your Zelle email address (US residents only), or if you’re wiring the money, your bank details. Click Send.
Zelle transfers usually happen in minutes, but a bank transfer can take up to two business days.
To withdraw crypto, click Withdraw Crypto. You’ll then see the following page.
Enter how much you want to send, which currency you’d like to withdraw, the wallet, and the wallet address.
We support USDT, USDC, DAI, pUSDT wallets.
Step #4 — Repay the loan
To repay your loan, simply deposit funds to your MyConstant account. All deposits earn 4% APY through instant access (shown below). Deposit from this page and the platform will deduct the repayment automatically from your account when your loan matures. You can deposit in fiat (USD or Stablecoin) or pay back in one of the cryptos you used to secure your loan.
It’s important to repay your loan on time. If you’re between 24–72 hours late, you’ll pay an extra 10% of the loan amount. If you’re more than 72 hours late, we’ll sell your collateral to repay the investor. Selling your collateral is always a last resort, but it’s the only way we can give our investors the confidence to lend through our platform.
And that’s it — you are now an expert in how to borrow money online using crypto-backed loans. So next time you’re in a hurry for some cash but don’t want to liquidate your assets, give us a try!
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