A Bitcoin-backed loan lets you borrow cash or stablecoins using your Bitcoin as collateral, without selling it. You keep ownership of your crypto, get liquidity when you need it, and repay the loan over a set term. When the loan is paid off, your full collateral is returned.
For long-term holders, that’s the appeal in one sentence: access dollars today while keeping your position for tomorrow. Below, we break down exactly how these loans work, what they cost, where the risks are, and how to decide if borrowing against your Bitcoin makes sense for you.
What Is a Bitcoin-Backed Loan?
A Bitcoin-backed loan is a secured loan where your Bitcoin serves as collateral. Instead of checking your credit score, the lender bases the loan on the value of the crypto you pledge. You transfer your Bitcoin to the lender’s custody for the life of the loan, receive funds in USD or stablecoin, and get your collateral back once the balance is repaid.
It works much like borrowing against a home or a stock portfolio: the asset secures the loan, you retain ownership, and a missed obligation puts the collateral at risk rather than your credit history. Because the loan is secured by crypto rather than your creditworthiness, most platforms—SALT included—require no credit check.
SALT has originated Bitcoin-backed loans since 2016, making it one of the longest-running platforms in the category.
How Does a Bitcoin-Backed Loan Work?
The process is straightforward and usually faster than a traditional loan:
- Open an account and apply. With SALT, you can set up an account and apply with no credit check.
- Deposit your collateral. You transfer Bitcoin (and, if you choose, other supported assets) into custody to secure the loan.
- Receive your funds. Once approved, your loan is funded in USD or stablecoin—often within one to two business days.
- Make payments over your term. You repay according to your loan agreement, with terms typically ranging from 12 to 60 months—and some loan structures require no monthly payments at all.
- Get your collateral back or refinance into another SALT loan When the loan is repaid in full, your Bitcoin is returned to you. (Here’s exactly what happens when a Bitcoin-backed loan matures.)
You can combine multiple cryptoassets as collateral, and the amount you can borrow depends on your loan-to-value ratio—covered next.
Rates, Terms & Loan-to-Value (LTV)
Three numbers determine the shape of any crypto-backed loan: your rate, your term, and your loan-to-value ratio.
Loan-to-value (LTV) is the size of your loan relative to the value of your collateral. If you deposit $100,000 in Bitcoin and borrow $40,000, your LTV is 40%. A lower LTV means more cushion against market swings; a higher LTV gives you more cash up front but less room before a margin call.
Rate is what you pay to borrow. SALT loans start at APRs from 7.49%,* with the rate you receive depending on factors like your LTV, loan amount, term, and jurisdiction. (SALT now offers the same rate at every loan size.)
Term is how long you have to repay—at SALT, generally 12 to 60 months. SALT loan minimums vary by jurisdiction, and charge no origination, prepayment, or custody fees.
Because the value of your collateral moves with the market, LTV is the number to watch most closely throughout the life of your loan.
What Can You Use a Bitcoin-Backed Loan For?
One of the biggest advantages of borrowing against Bitcoin is flexibility. Common uses include:
- Covering a large purchase or unexpected expense without selling your crypto
- Funding a business—payroll, inventory, or expansion
- Consolidating or paying down higher-interest debt
- Accessing liquidity while staying invested for potential long-term growth
SALT offers both personal and business loans, so the same core product can serve an individual holder or a company managing its treasury.
The Risks: Margin Calls, Volatility & How SALT Helps
The central risk of any crypto-backed loan is volatility. Because your collateral is Bitcoin, a sharp drop in its price raises your LTV—and if it climbs too high, you face a margin call, where you’re asked to add collateral or pay down the loan to restore a healthy ratio. If the ratio isn’t corrected, a portion of your collateral can be sold to protect the loan. (See our borrower’s guide to navigating Bitcoin downturns for how to prepare.)
This is the part of crypto lending borrowers worry about most, and it’s where SALT’s risk-management tools are designed to help:
- Stabilization can convert collateral to a stablecoin during a downturn to help preserve its value before it reaches a liquidation point.
- SALT Shield™ removes liquidation risk entirely for the remainder of your loan term. For a one-time fee, your loan is protected from margin calls and forced liquidation, no matter how the market moves. It’s available on active 1-year SALT loans larger than $50,000, with an LTV below 70% and more than three months from maturity.
Together, these tools give borrowers far more control than a simple liquidate-on-breach model—and with SALT Shield™, eligible borrowers can take forced liquidation off the table for their entire loan term. Even so, borrowing against Bitcoin still carries market risk: your collateral can change in value and the loan still needs to be repaid, so borrowing at a conservative LTV remains a smart foundation.
Why Borrow With SALT?
- Track record since 2016. SALT is one of the longest-running Bitcoin-backed lenders, with proven processes built across multiple market cycles.
- US-regulated. SALT operates under US jurisdiction with the licenses required to lend and service loans where it’s approved. (NMLS #1711910)
- No credit check. Your loan is based on your collateral, not your credit score.
- Transparent, low fees. No origination, prepayment, or custody fees, with APRs starting from 7.49%.*
- Built-in risk tools. Stabilization and SALT Shield™ help you manage volatility on your terms.
How to Get Started
Getting started takes minutes:
- Open a SALT account (no credit check).
- Explore the platform and review available terms for your situation.
- Apply, deposit your collateral, and—once approved—receive your funds.
Ready to put your Bitcoin to work without selling it? Open an account and see what you qualify for.
Related Guides
Keep exploring how Bitcoin-backed loans work:
- Bitcoin-Backed Loans vs. HELOCs and Personal Loans
- Borrowing Against Bitcoin vs. Selling: How Each Is Taxed
- Bitcoin-Backed Loans Without Monthly Payments
- What Happens When Your Bitcoin-Backed Loan Matures
- What Happens If Bitcoin Prices Fall? A Borrower’s Guide
- Bitcoin-Backed Loans by State
- Bitcoin-Backed Loans for Private Companies
- The Same Rate at Every Loan Size: SALT’s New Pricing
- How to Refinance a Crypto-Backed Loan
- How to Retire on Bitcoin in 10 Years
Frequently Asked Questions
Do I need a credit check for a Bitcoin-backed loan?
No. Bitcoin-backed loans are secured by your crypto, not your credit history, so SALT does not require a credit check. Your borrowing power is based on the value of the collateral you pledge.
Can I lose my Bitcoin if the price drops?
A sharp price drop raises your loan-to-value ratio and can trigger a margin call, asking you to add collateral or pay down the loan. If the ratio isn’t restored, a portion of your collateral may be sold to protect the loan. SALT’s Stabilization and SALT Shield™ tools are designed to help you manage these situations before they reach that point.
How much can I borrow against my Bitcoin?
The amount depends on your loan-to-value ratio and the value of the crypto you pledge. SALT loan minimums vary by jurisdiction, and you can combine multiple supported crypto assets as collateral to increase your borrowing power.
What can I use the loan for?
Most borrowers use Bitcoin-backed loans for major purchases, business needs, debt consolidation, or simply to access cash while keeping their crypto invested. SALT offers both personal and business loans.
How long does it take to get funded?
After approval, SALT loans are often funded within one to two business days.
Is SALT available in my state or country?
Availability varies by jurisdiction. Check current state and country coverage on SALT’s jurisdiction map at https://saltlending.com/map-list. For a state-by-state breakdown, see Bitcoin-Backed Loans by State.
*Available rates and terms are subject to change and may vary based on loan amount, qualifications, jurisdiction, and collateral profile. Other terms, conditions, and restrictions may apply. Products and services are not available in all jurisdictions; for current availability, see https://saltlending.com/map-list. This article is for educational purposes only and does not constitute financial, investment, tax, or legal advice. Borrowing against digital assets involves risk, including the risk of margin calls and loss of collateral in volatile markets. NMLS #1711910.
