Dollar Loans

Ledn Dollar Loans are available globally, but certain jurisdictions have restrictions. Here’s what you need to know:

Ineligible Jurisdictions:

• U.S. States: California, Connecticut, Hawaii, Louisiana, Nevada, North Dakota, South Dakota, Tennessee, Vermont, Washington, Washington D.C.
• Canadian Provinces: New Brunswick, Nova Scotia, Saskatchewan, Quebec
• International Regions: For a complete list, please refer to Ledn Legal Ineligible Jurisdictions.

In some eligible areas, loans may be subject to minimum principal requirements or confirmation of commercial purpose. Please visit Eligibility page to know more.

Ledn offers two options for collateral management in Dollar Loans: Standard Loans and Custodied Loans. The differences between these two loan types mainly revolve around the use of collateral and the associated credit risk.

Use of Collateral

• Standard Loans:
  With Standard Loans, Ledn has the right to rehypothecate the collateral you post. The primary purposes of rehypothecating collateral are:
  1. To secure USD to finance the loans.
  2. To generate interest, which helps lower the interest rate you pay.
     Collateral posted for Standard Loans is ring-fenced from the credit risk associated with Ledn Growth accounts, meaning that exposure is limited solely to rehypothecation activities related to the Standard Loans. Detailed information on these practices can be found in our Open Book Report and your Ledn dashboard.
     
     
• Custodied Loans:
  For Custodied Loans, the collateral you post to secure your loan is only posted by Ledn to an institutional USD funding partner, such as a bank or credit fund, and is held securely with qualified custodians. Neither Ledn nor the institutional partner has the right to lend out your collateral to generate interest. Consequently, Custodied Loan collateral is also ring-fenced from any credit risk related to rehypothecation activities of Standard Loans and Ledn Growth accounts.

Interest Rate Differences

The interest rate for Custodied Loans is higher than that of Standard Loans. This reflects the fact that the Custodied Loan collateral is not used to generate interest, offering you an added layer of safeguards.

A Dollar Loan from Ledn allows you to borrow funds against your Bitcoin (BTC) or Ethereum (ETH) without selling your digital assets. This means you can keep your digital assets intact while accessing liquidity in USD or USDC.

To qualify for a Dollar Loan, you only need to have the minimum of $1000 U.S. dollars worth of eligible digital assets in your Transaction account to be used as collateral, or you can send the collateral from an external source.

How It Works:

• Collateral & Loan-to-Value (LTV): Loans are typically issued at a 50% LTV. For example, if your BTC or ETH is worth $10,000, you can borrow up to $5,000.
• Interest Rates Fees & Terms:
  • Loans have a standard 12-month term, with flexible repayment options.
  • No Prepayment Penalties: You can repay your loan early without incurring extra charges.
  • Interest Calculation: Interest on Ledn Loans accrues on a daily basis. Interest rates vary based on your loan type (Standard vs. Custodied) and jurisdiction.
  • Interest Payments: Interest payments and any applicable fees are not due until the loan is closed.
  • Admin Fees: There is a 2% administrative charge at Loan origination. Admin fees are not applicable to clients residing in Canada and the United States.

Collateral Management Options:

• • • Standard Loans: For these loans, Ledn has the right to lend the collateral to institutions to earn interest, which in turn, Ledn uses to lower the interest rate of these Standard loans.
    • Custodied Loans: Collateral is posted to an institutional USD funding partner, being a bank and/or credit fund, and held in custody. Ledn does not have the right to lend out collateral to institutions to generate interest. The interest rate for these loans will be higher than Standard Loans and reflect the fact that the Custodied Loan collateral is not subject to the credit risk associated with the rehypothecation of Standard Loan collateral.

Key Benefits:

• Quick loan disbursement, typically within 24 hours of receiving collateral.
• No early prepayment penalties and no payments until your loan is closed.
• Flexible repayment in BTC, ETH, USDC, or via wire transfer.

Applying for a Dollar Loan is easy. Just follow these steps:

1. Log into Your Ledn Account: Navigate to your dashboard.
2. Select the Loan Type: Choose "BTC-backed" or "ETH-backed" loans.
3. Fill Out the Application: Provide the loan amount and collateral information.
4. Submit Collateral: Once approved, transfer collateral to the provided wallet address:

• Go to your Loan Tab.
• Click  ‘Send Collateral’
• Select the ‘Transaction Account’ Option or the ‘External Source’ Option depending on your preference, enter the amount and click ‘Submit’

5. Receive Funds: Disbursement typically occurs within 24 business hours after collateral verification.

Ensure accurate details during the application to avoid delays.