The Part of the FAQ Most People Skim Past
Buried in the FAQ, in answer to a fairly plain question — “What determines the term of the Loan and the interest rate?” — is a detail easy to read past on a first pass: “We will offer you the optimal Loan term during the application processing. At the same time, you as a Creditor can choose the interest rate that suits your needs.” One sentence, two very different mechanics packed into it. The loan term gets proposed by the platform based on the specifics of the application. The interest rate, on the other hand, is something the borrower — referred to as the Creditor in that FAQ answer, since they’re effectively lending their crypto collateral’s value against the loan — actually sets.
That’s worth pausing on, because it’s not how most of this market works.
How Other Crypto Lenders Usually Set Rates
Across the crypto-backed lending space, the rate is typically the platform’s decision, not the borrower’s. Some lenders price by loyalty tier — the more of the platform’s own token a borrower holds relative to their portfolio, the better rate they unlock. Others price algorithmically, adjusting in near real time based on how much of a lending pool is currently being used. Larger platforms often use fixed tiers based on loan size or collateral type, sometimes layering in an origination fee that changes the effective annual cost beyond the quoted headline rate.
In every one of those models, the number a borrower ends up paying is calculated by something outside their control — a formula, a tier table, a token balance. The borrower’s only real lever is which platform to use, not what number to type in.
What “You Choose the Rate” Actually Changes
Letting the Creditor choose the rate flips the usual order of the conversation. Instead of a platform announcing a number and the borrower deciding whether to accept it, the process starts with the borrower stating what rate works for their situation. That’s a meaningfully different negotiation position — particularly for anyone who already has a clear sense of what return they’d need to make holding crypto (rather than selling it) worthwhile.
It doesn’t mean any rate gets automatically honored — every application still goes through individual processing, and the FAQ is explicit that loan terms depend on “the characteristics of your individual case.” What it does mean is that the starting point of the conversation is the borrower’s own number, not a rate card they have no input into.
The Term Is Still Set During Processing — Here’s Why That Split Makes Sense
It’s worth noticing what’s split here: rate is proposed by the borrower, term is proposed by the platform. That’s not an inconsistency — it reflects that the two variables depend on different things. The term realistically depends on details the platform is better positioned to evaluate during processing: the collateral asset, the loan amount relative to the 50% LTV structure, and the specifics of the individual case. The rate, by contrast, is something the borrower is often in the best position to judge for themselves — what number makes sense against their own opportunity cost of not selling the underlying crypto.
What to Actually Think About Before Naming a Rate
Because the rate isn’t handed down by a formula, the responsibility of picking a sensible number sits with the borrower — which is a different kind of decision than clicking “accept” on a platform’s quoted rate. A few things worth weighing before entering the application: what a lender or exchange would realistically charge for a comparable loan elsewhere, what the borrower would need to earn (or avoid losing, by not selling) to make the loan worthwhile, and how the 50% LTV and margin call mechanics already covered in the FAQ affect the real cost of the loan beyond the interest rate alone.
None of this changes the underlying risk of a crypto-backed loan — a sharp drop in collateral value still works the way the FAQ describes, with liquidation on the open market or refinancing as the stated options. What changes is that the rate itself is a number borrowers arrive at deliberately, not one they’re handed and asked to accept.
More detail on how loan terms, collateral, and refinancing work: loancryptobank.com/faq/