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CoinRabbit crypto loan review
High LTV margins can keep you from liquidation, but expect to pay higher interest.
CoinRabbit offers crypto loans as low as $100 USDT with no maximum loan amount or term limits and accepts more than 25 types of cryptocurrency as collateral.
Its high liquidation threshold and multiple margin calls may keep you from losing your collateral when the market dips, but that doesn’t mean your collateral is secure.
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14.00%
Interest Rate
Details
| Accepted Collateral | BTC, ETH, BCH, Nano, DOGE, DGB, XMR, FIRO, XPR, UNI, COMP, LINK, ENJ, ZRX, MKR, BAT, BNT, CHZ, SUSHI, FTM, SNX, YFI. |
|---|---|
| Issued Currencies | USDC, USDT |
| Interest Rate | 14.00% |
| LTV | 50% |
| Min. Loan Amount | $100 |
| Min. Margin Call Threshold | 10% |
| Liquidation Threshold | 45% |
Pros
- Loans as small as $100 USDT
- Multiple margin calls to help you avoid liquidation
- High liquidation LTV of 45%
- No maximum loan amount or loan term limits
- Accepts 25+ types of cryptocurrency
- Funds loans within 5 to 10 minutes after you deposit your collateral
Cons
- High interest rate of 14% APR
- Unclear security protocols
- $100 prepayment fee for paying off the loan within 30 days
- Only pays out in USDT or USDC stablecoin
Our take on CoinRabbit
If you currently have a Guarda wallet or use the ChangeNow exchange, you may have already heard of CoinRabbit, which is the lending arm of the partnership between the three crypto companies.
There’s a lot to like about the provider, especially in how it deals with the fluctuating value of your collateral by providing multiple margin calls to help you balance your account before it’s forced to liquidate your crypto.
But CoinRabbit doesn’t offer insurance to help protect your collateral while you’re paying back the loan. And while CoinRabbit was popular among crypto-focused media and bloggers when it was founded in 2020, most praised the provider for its extremely low interest rate of 5%.
Today the lender charges 14% APR, which is higher than many of its competitors. It’s also not a great choice for short-term loans, as you’ll pay a $100 prepayment penalty if you pay off your loan within the first 30 days.
Borrow up to 50% of your collateral with no maximum limit
CoinRabbit offers loans for as little as $80 USDT for Bitcoin users and $30 USDT for anyone using Ethereum and Bitcoin Cash. But, like most crypto loan providers we’ve reviewed, the lender doesn’t have a maximum cap. This means you can borrow as much as you want as long as you have the collateral you need.
CoinRabbit requires a 50% loan-to-value (LTV) ratio, which means you’ll need to provide double your loan amount in collateral to qualify. For example, if you need a $5,000 loan, you’ll need to put up $10,000 in collateral.
You’ll need to monitor the value of your collateral throughout the term of the loan to ensure it doesn’t drop below the lender’s LTV margin.
What happens if my crypto drops in value?
CoinRabbit will ask you to deposit more collateral to your loan, if the value drops below a specific threshold, which is often called a “margin” in crypto circles. The lender has three margin zones to indicate drops in value for your collateral: yellow, orange and red. If notifications are turned on for your Guarda wallet, CoinRabbit will notify you when your crypto reaches each zone.
- Yellow zone – the rate of the collateral has dropped by 10%
- Orange zone – a 25% depreciation of the collateral currency rate
- Red zone – a devaluation of the collateral has reached 35%
- Liquidation zone – a 45% drop since the collateral currency original rate
If you choose not to activate your wallet notifications, you can still track the value of your collateral using your CoinRabbit dashboard. The dashboard shows your collateral’s current value, and when your values will get a margin warning to keep your loan account in balance.
Before your crypto reaches the liquidation zone, you can either pay off the loan or add collateral to your account to bring your account back to good standing. If you let the value of the collateral drop to the liquidation zone, CoinRabbit will liquidate your collateral to pay off the loan and close the account.
CoinRabbit rates, fees and terms
CoinRabbit doesn’t charge an origination or other lender fee and only charges a $100 prepayment fee if you close your loan within the first 30 days.
You’ll pay 14% APR, which is calculated monthly. But this loan doesn’t have monthly payments like a traditional personal loan. Your interest is added to the repayment amount, and is due in full when you’re ready to pay off your loan and get your collateral back.
Because CoinRabbit doesn’t have any term limitations, you can keep your loan open for a few days or over a year — but your interest will continue to accumulate.
What crypto can I use?
Secure your CoinRabbit loan using any one of over 25 crypto currencies, with more slated to be added soon. The loan pays out in both USDC and USDT, both stablecoins that can be exchanged for fiat money.
CoinRabbit’s currency guidelines are pretty average among crypto loan providers. Some only offer loans in Bitcoin and Ethereum, while others like MyConstant support over 60 cryptocurrencies.
How fast can I get my money?
CoinRabbit promises to release your loan within 5 to 10 minutes from when you apply. But if you haven’t yet set up your Guarda wallet, it can take another 20 minutes or so to get your wallet and transfer your crypto to it.
How does CoinRabbit protect my collateral?
As with most crypto loans, CoinRabbit takes your collateral from your wallet and secures it in a Guarda “cold” wallet, meaning one not connected to the Internet, and says your private keys are kept in “secure storage” that can only be accessed by specified IP addresses through a VPN. The lender also claims that the private keys are renewed on a monthly basis, and uses ChangeNow’s risk control system to check on your balance every second.
But hacking isn’t the only risk to your collateral. Crypto loans aren’t CDIC-insured, nor does CoinRabbit offer any kind of insurance on its wallet.
So while the lender uses a lot of security-focused language, in the end, you’re handing the keys to your crypto over to them and trusting the company to keep your collateral safe. If Guarda or CoinRabbit go out of business, you risk losing your collateral.
How to apply
To apply for a loan, you first need a Guarda wallet funded with the minimum amount of crypto you want to use as collateral. Once that’s in place, use the CoinRabbit calculator to enter the amount of your collateral and the loan you want. Then follow the steps to send CoinRabbit your collateral and wait for CoinRabbit to fund the loan.
How repayments work
CoinRabbit loans don’t have a monthly repayment plan. You pay back the loan with interest as one lump sum, and your collateral is returned to you within 5 to 10 minutes. Your dashboard allows you to monitor the cost of repaying the loan with interest.
If you pay back the loan within the first 30 days, you’re charged a $100 closing fee.
CoinRabbit reviews are positive
Customers on Trustpilot gave CoinRabbit a trustscore of 4.4 out of 5 stars, with many praising the lender’s customer service, even after experiencing small technical glitches that slowed down the loan process.
The only negative reviewer complained that their collateral was liquidated to cover the loan. And CoinRabbit responded, claiming that the value of the collateral had fallen below the loan’s liquidation threshold.
Alternatives to CoinRabbit
While CoinRabbit has a lot to offer, there are still some areas where the provider falls short. For example, if you’re looking for a lower interest rate, BlockFi offers rates between 4.5% and 9.75% on its crypto loans, which is well below the 14% CoinRabbit charges.
And if you’re concerned about the security of your collateral and want a lender that provides insurance, SALT Lending advertises an insurance policy that can cover your collateral up to $10 million for incidents like theft, extortion or technology errors. However, it doesn’t cover you if SALT Lending goes out of business.
To make sure you find the best loan provider for you, learn more about crypto loans or select More info to read our reviews of the providers below.
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