What is a Crypto-Backed Loan?

A crypto-backed loan allows you to borrow Australian Dollars by using your cryptocurrency as collateral. Your crypto assets remain yours throughout the loan term—you're simply using them as security, similar to how a traditional mortgage uses property as collateral. With Vield, only BTC and ETH can be used as collateral.

How It Works

Step 1: Deposit Collateral

You deposit Bitcoin (BTC) or Ethereum (ETH) into a secure wallet provided by Vield. Each customer has a unique wallet address where your crypto is held. Your crypto deposit will be screened via Elliptic and Chainanalysis.

Step 2: Loan Application

Vield calculates your maximum loan amount based on:

  • The current market value of your crypto (in AUD)
  • A maximum Loan-to-Value Ratio (LVR) of 50%

Step 3: Loan Assessment

You will be required to go through a serviceability test and a light credit assessment check. You are also required to complete the loan questionnaire and upload a bank statement.

Example:

If you deposit 1 BTC worth $50,000 AUD, you can borrow up to $25,000 AUD.

Step 4: Loan Approval

Your loan application will be submitted to the credit committee to be reviewed. Upon approval, the loan agreement will be generated for execution.

Step 5: Receive Funds

Once approved, your loan amount is transferred to your nominated Australian bank account within 2 business days.

Step 6: Manage Your Loan

You make regular interest payments according to your loan agreement. Your crypto remains in your dedicated wallet throughout the loan term.

Step 7: Repay and Reclaim

When you repay your loan in full, your crypto is transferred back to your personal wallet within 2 business days.

Key Loan Features

Collateral:

  • Accepted cryptocurrencies: Bitcoin (BTC) and Ethereum (ETH)
  • Held in your dedicated, secure wallet
  • Trackable on the blockchain at any time

Loan Terms:

  • Loan amounts: $2,000 - $250,000 (personal), $2,000 - $500,000 (commercial)
  • Fixed term: 12 months
  • Fixed interest rate: 13% APR
  • Interest compounded daily

Fees:

  • 2% origination fee (deducted from loan amount)
  • Early repayment fee (if applicable)
  • Late payment fees - $20 for personal loans & $100 for commercial loans

Custodial vs Non-Custodial Loans

Vield Loans are Custodial

When you take a loan with Vield, your crypto is held in custody in a secure wallet. While the assets remain legally yours, they are held as security for the loan. You cannot access or transfer them until the loan is repaid.

Benefits:

  • Lower interest rates due to secure collateral
  • No risk of losing access to collateral through user error
  • Professional custody with institutional-grade security
  • Full blockchain transparency—you can track your assets

Non-Custodial Alternative

Some crypto lenders offer non-custodial loans where you retain control of your crypto. However, these typically come with:

  • Higher interest rates
  • Lower loan amounts relative to collateral
  • More complex smart contract requirements

Permitted Use of Funds

Personal Loans

Funds must be used for personal or domestic purposes, such as:

  • Home renovations
  • Debt consolidation
  • Major purchases
  • Education expenses
  • Medical expenses

Commercial Loans

Funds must be used for business purposes only.

Prohibited Uses

Loan funds cannot be used for:

  • Gambling or betting
  • Bail or bond payments
  • Payments to government agencies
  • Charitable donations
  • Any illegal activities

Benefits of Crypto-Backed Loans

Access Liquidity Without Selling:

Borrow against your crypto without triggering a taxable capital gains event. Your crypto remains yours and can appreciate in value during the loan term.

Fixed Terms and Rates:

Know exactly what you'll pay with a fixed 13% APR and a 12-month term. No surprises or variable rate changes.

Fast Approval:

Funds deposited within 2 business days of approval—much faster than traditional secured loans.

No Credit Impact:

Your crypto serves as collateral, meaning your credit score is not a primary factor in loan approval.

Risks to Consider

Market Volatility:

If your crypto value drops significantly, your Loan-to-Value Ratio (LVR) may increase. At 75% LVR, you'll need to make additional repayments or add more collateral. At 85% LVR, you may face default proceedings.

Liquidation Risk:

If you fail to maintain your LVR or repay as agreed, Vield may liquidate your collateral to recover the outstanding loan amount.

Opportunity Cost:

While your crypto is locked as collateral, you cannot use it for other purposes or move it to take advantage of market opportunities.

Need Help?

Email: support@vield.io

Phone: (02) 9157 9669