What is a BlockFi Loan? – Applying for a BlockFi Loan Explained, Features & How it works
We will be taking a dive into the steps required for applying for a BlockFi Loan, Features of BlockFi, Benefits of BlockFi Loan questions like What is BlockFi?, How does BlockFi Loan work? , How to open a BlockFi Account, How to apply for a BlockFi Loan and a whole lot more will be answered here. So stay with us as we take a dive into the BlockFi world.
What is BlockFi?
Flori Marquez and Zac Prince founded the idea of BlockFi, conceptualized and launched the concept in August 2017. BlockFi has a history of rapidly rising in response to the importance and momentum of cryptocurrencies in the worldwide market.
BlockFi is a global cryptocurrency exchange that also offers interest-bearing accounts and low-interest loans. There are no transaction fees on trades, and there are no hidden costs or minimum balance requirements.
BlockFi is one of the few crypto exchanges with a US presence. The New York State Department of Financial Services regulates its custodian, Gemini.
BlockFi hasn’t raised money through an ICO (initial coin offering) or utility tokens. Instead, it earns money through its loan products and pays a consistent interest rate.
You can earn between 3% and 8.6% compounding interest on your cryptocurrency assets with a BlockFi Interest Account. There are no hidden fees or minimum balance requirements with this account.
The interest rate varies by currency and is subject to market fluctuations. Interest is calculated daily and credited to your account monthly, so you’ll be earning interest on your interest each month. You can choose the currency in which your interest is paid if you choose the Interest Payment Flex option.
BlockFi is the first to introduce a Bitcoin rewards credit card, a Visa credit card that earns 1.5 percent of purchases in bitcoin. Your Bitcoin rewards will be deposited into your BlockFi Interest Account, where they will begin earning interest immediately.
If you’re looking to get a US Dollar loan using your Bitcoin as collateral, then BlockFi can help. They make it fast and easy to apply and have funds delivered to your bank account. Currently, loans start at $5,000. If you’re in need of a larger loan, BlockFi offers loans up to $10,000,000.
Basic Distinctive Features of BlockFi
BlockFi has specific features that make it desirable to both traders and investors, including but not limited to the following;
- There’s no minimum deposit required to operate its account
- You are not required to have minimum balance whatsoever in your account
- You can earn up to 9.5 percent on your crypto deposit with BlockFi, and you don’t have to pay any maintenance fees..
- Withdrawal fees apply on various crypto assets, though negligible to be considered of relevant financial effect.
- A withdrawal limit of $5000 applies for each wire transfer.
- Transaction turn-around-time/speed is within 1-5 business day.
- There’s insurance in place against your crypto asset.
- High-end security is in place.
- Accessible on both on iOS and Android.
How does BlockFi loan Work
BlockFi is created to make crypto lending a better, simpler process. They offer the fastest, most hassle-free application process in the market.
The loan-to-value ratio is computed by dividing the loan amount by the collateral value. Users are lent at a 35 percent initial loan to value ratio because risk modeling revealed that this is a suitably conservative rate — in order to have a limited number of projected trigger events and gives BlockFi users breathing room in the case of market turbulence.
Here’s a bit more about how borrowing from BlockFi works.
It takes less than two minutes to apply for a BlockFi loan, and no membership or tokens are necessary to apply or receive a loan offer.
Below is a rundown on how to get a BlockFi Loan:
First, choose what type of crypto asset — Bitcoin or Ether — you’re putting up as collateral, and either the collateral amount you would like to deposit or cash amount you would like to receive.
Provide your email address and click “Get Started”. We will send you an email to validate your email address and start your application.
Tell us a bit more about yourself.
Note: You’ll need to provide some personal details and information on the nature of your loan including — name, address, DOB, phone #, SSN, source of your crypto being used as collateral, reason for loan, wallet public key, bank information.
After you review the information and submit your application, you will receive a loan decision or offer within 24 hours.
Transfer your crypto assets to our secure storage address after you’ve reviewed your offer and signed the loan agreement, and we’ll send the funds to your bank account.
Make monthly interest-only payments, with a final payment of principal at the conclusion of the period – which is no more than 12 months. Because we keep things flexible, you can easily prepay or refinance at the conclusion of the term. For your convenience, we also accept payments in crypto assets (BTC or ETH) or US dollars.
Benefits of the BlockFi loan
As you are aware, BlockFi is designed, among other things, to assist users with USD loans in refinancing or carrying out their pressing financial commitments at every step of the way.
Here are why I think the BlockFi facility should be ideal for your financing needs.
There’s a strong inclination to change your crypto assets to cash/USD, depending on the situation. Liquidity is expressly assured by this provision. You do not need to sell your crypto assets in order to obtain funds; instead, you can use them as collateral.
One emerging concern with borrowing is the interest rate levied; interest rates at BlockFi are quite competitive, making it difficult to resist when compared to market and industry rates on equivalent facilities with other exchanges.
The good news is that taking out a loan with BlockFi does not incur any tax on the funds received.
Your “Credit score” is one factor in determining loan eligibility, and I encourage you to breathe a sigh of relief because BlockFi does not use your credit record to establish your credit worthiness. However, your capacity to repay your debt will put you in a better position for future loans.
With BlockFi, you can rest assured and certain that your crypto assets are secure.
BlockFi loan duration: BlockFi normally has a loan tenure of no more than 12 months.
BlockFi rates: You can borrow money at rates as low as 4.5% APR where you are not expected to sell your crypto assets to get a loan rather use them as collateral. Origination fee of 2% applies
BlockFi credit score: Your loan request is not dependent on your credit score to ascertain your eligibility.
Customer service Phone: 1-646-779-9688
How to open a BlockFi account
To open an account you will have to visit the BlockFi website.
- Complete the form as presented with your first and last name, preferred valid email address, strong password, and referral code where applicable though optional.
- Check the terms and policy boxes then submit.
- You are required to upload a clear ID document, on approval and creation of your account you will have to link your bank account and transfer funds into the BlockFi account immediately.
- After you’ve created your account, you might want to apply for a BlockFi loan.
Note: A daily credit limit of $500 applies to new accounts, whereas a daily credit limit of $1,000 applies to established/old accounts.
How to apply for a BlockFi loan
Below is a step-by-step guide to applying for a BlockFi Loan.
Step one: You must are to select an asset as collateral from the borrow icon, followed by the cash amount you intend to obtain in this scenario.
Step two: Enter “Your email address” in the available column, then click “Get started.” An email will be delivered to your inbox with instructions on how to validate your email account and begin your loan application.
Step three: You are needed to supply your data/information at this stage, which includes your name, address, date of birth, phone number, SSN, source of crypto collateral, reason for the loan, wallet public key, and bank details.
Step four: After reviewing your information, you will receive a loan decision offer within 24 hours.
You will then be required to sign the loan agreement, after which you will be required to submit the crypto asset you plan to use as collateral to the BlockFi storage address, and the funds will be sent to your desired bank account.
How to Payback Your Loan
There are various options by which a BlockFi loan can be paid back Each option has its own unique feature. And we will be sharing them with you below:
Pay back with crypto:
a. Collateral Return Speed: Same Business Day
b. Process: Reach out to a team member about paying off your loan using crypto prior to your maturity date. BlockFi will confirm your loan balance. You will then have 2 options:
c. Pay off your loan balance in stablecoin (PAX, USDC or GUSD). We receive these funds within 10 minutes and are able to release your crypto within an hour, during business hours.
d. Collateral liquidation: Pay off your loan balance by liquidating the crypto quantity needed to pay off your loan at the current market price less trading fees (typically ~1%). BlockFi will then return the remaining collateral to a wallet address of your choice.
a. Collateral Return Speed: 1-2 Business Days
b. Process: Send a wire to your loan processor, Scratch
c. Timeline: Once your wire is processed, typically on the same business day it is sent, we will return your crypto back to the wallet address of your choice
Note: Your bank may charge you wire fees
a. Collateral Return Speed: 5-10 Business Days
b. Process: Make your full payment through your Scratch portal. This will initiate an ACH to the bank account you have connected to Scratch. ACHs take at least 5 business days to clear between banks.
Note: For compliance purposes, BlockFi must wait at least 48 hours after the funds are marked as “processed” on Scratch before returning your crypto to the wallet address provided. This wait time is in place to account for ACH failure and bouncebacks.
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