Coinbase Loans
Verdict: Coinbase offer no credit-check loans at a decent 8% APR. However, this brand best suits newer users and those who place greater emphasis on security; predominantly due to only supporting one collateral currency (BTC), which can prove volatile at the best of times.
Although the LTV & loan health formula can prove confusing for newer users, it remains easy to learn and understand. 98% of user currency is stored offline in cold storage, with all hot-wallet currency completely insured.
Please note, Coinbase calculates loan-to-value (LTV) ratio with the following formula; loan amount divided by value of BTC collateral, with loan health levels determined through subtacting the LTV from 100%. For example, those who borrow $100 with a BTC collateral of $1000 will have an LTV equal to 10%, resulting in a loan health of approx. 90%. Those who find their loan health below 40% will require BTC collateral or a payment.
However, those who take no action will have their BTC collateral sold by Coinbase until your loan health increases to 50%. One problem we find with BTC only collateral is that it's very volatile. When the price of BTC drops significantly, your loan health could decrease, requiring repayment or additional collateral. Whilst we understand Coinbase's reason behind sticking to BTC, we still feel like additional currency support would prove a welcome addition.
- Fair 8% APR
- No credit checks
- User friendly design
- Fairly fast loan payouts
- Secure servers & established brand
- Fully insured against any loss of currency
- Secure - over 98% of customer currency in cold storage
- 1 year term - pay interest each month with up to 1 year to repay the principal
- Confusing margin call LTV.
- Unavailable in China
- Automated live support
- Only accepts BTC collateral
- Fairly sizeable $2000 minimum loan
Specification: Coinbase Loans
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