Vield Loans

LVR and Its Role in Crypto-Backed AUD Loans at Vield

Johnny Phan
October 26, 2023
min read

Understanding the Loan-to-Value Ratio (LVR) is important for anyone approaching crypto-backed loans. It's a metric that determines how much you can borrow based on the value of your cryptocurrency. At Vield, we've fine-tuned the LVR to benefit our clients, ensuring both substantial lending power and risk management. Let's delve into what LVR means for you and how Vield leverages this key indicator to craft optimal loan solutions.

Understanding LVR

The LVR is the percentage of your loan amount against the total value of your collateral. In simple terms, it measures the cushion between the loan provided and the market value of your cryptocurrency assets. This is important because it affects everything from your borrowing limit to the interest rate you'll receive.

Vield's LVR Policy

Our policy caps the LVR at 50%, a deliberate choice to balance your borrowing capacity with a safety net against market volatility. This means you can borrow up to half the value of your crypto assets, maintaining a buffer that protects both your interests and Vield's.

Financial Implications for Borrowers

An LVR at 50% provides a robust loan amount while protecting your portfolio from market dips. It ensures that even if market prices fluctuate, you have a lower risk of a margin call or liquidation. This LVR level is especially beneficial in the crypto space, where asset prices can be unpredictable.

Vield's Approach to LVR Fluctuations

In a market known for its swings, Vield stands by its borrowers with proactive LVR management. If market changes affect your LVR, we communicate early, offering options to rebalance your loan. This can mean providing additional collateral or repaying part of the loan to maintain the agreed LVR, ensuring ongoing loan stability and avoiding sudden liquidations.

At Vield, we believe a well-managed LVR is the foundation of a secure crypto-backed AUD loan. It’s not just about providing funds; it's about creating a sustainable financial product that grows with you. Contact us today to tailor your crypto-backed AUD loan with confidence.

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