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Guarda crypto loan review
Offers loans within minutes, but information on how your collateral is protected is hard to find.
Bottom line: If you need fast cash and don’t want to sell your cryptocurrency, Guarda offers quick-turn loans as low as $100 USD in stablecoin using a range of popular cryptocurrency as collateral. But there’s not much information about security protocols or how your collateral is protected during the loan term. See our take on Guarda loans.
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10.00% to 14.00%
Interest Rate
Details
| Accepted Collateral | BTC, ETH, BCH, DOGE, XRP, NANO |
|---|---|
| Issued Currencies | USDT, USDC |
| Interest Rate | 10.00% to 14.00% |
| LTV | 50% |
| Min. Loan Amount | $100 |
| Min. Margin Call Threshold | 10% |
| Liquidation Threshold | 45% |
Pros
- Loans as low as $100 USDT
- Supports multiple collateral types
- Funding in 10 minutes
- No credit check or KYC protocols to register
Cons
- Rates range from 10% APR
- Pays out in USDC or USDT, but you can exchange to fiat (CAD)
- Assets are held by an unspecified partner during loan term
- Limited information on security protocols
- Prepayment fee of $50 to $100 if you pay off your loan within 30 days
Our take on Guarda
Founded in 2017 and headquartered in Lisboa, Portugal, Guarda is a cryptocurrency platform that offers crypto loans through CoinRabbit. You can borrow as little as $100 USDT or USDC, with funding in under 10 minutes.
Interest rates are higher than some other crypto lenders, but this may be a fair tradeoff if you want a loan immediately and don’t want to wait 24 hours or more for your funds. You can also skip the KYC process with Guarda, avoiding the need to upload your ID and staying anonymous.
But with little information available about the company and its security protocols online, the service is best suited for people who:
- Already use the Guarda wallet
- Own multiple types of cryptocurrencies
- Trust the platform
- Want to skip the KYC process, as none is required
You may be able to get a lower rate or find another provider with more visible security protocols by shopping around for an alternative.
How much can I borrow?
Loans start as low as $100 USDT or USDC with no fixed maximum loan amount. As with all crypto lenders, the amount you can borrow depends on how much collateral you can pledge.
Guarda requires a 50% LTV on all loans, which means that you must pledge twice as much collateral as you borrow. So, to take out a loan of 100 USDT, you must pledge collateral that is worth 200 USDT.
A maximum LTV of 50% is typical for crypto lenders, though providers like Salt offer options for lower rates if you pledge more collateral. If you have enough crypto to support a lower LTV, you may be able to find a better deal elsewhere.
Guarda rates, fees and terms
Guarda charges a $50 to $100 service fee for loan terms of less than 30 days. It’s like a prepayment penalty. You won’t pay a service fee for loan terms of 30 days or more.
While the company’s website mentions an “annual fee” on loans, I confirmed with the company that there is no such fee. Only the accrued APR affects your repayment amount.
What crypto can I use?
Guarda allows you to use six major coins as collateral:
- Bitcoin (BTC)
- Bitcoin Cash (BCH)
- Dogecoin (DOGE)
- Ether (ETH)
- Nano (NANO)
- Ripple (XRP)
Guarda has plans to support six more types of coins in the near future.
Guarda pays out loans in the stablecoins USDC and USDT only. You can convert these funds to fiat through the platform after funding.
Get your money in minutes
Guarda advertises loan funding in five to 10 minutes in either USDC or USDT. If you want CAD, you need to convert your stablecoin into cash after funding.
How does Guarda protect my collateral?
Guarda says that it protects your collateral by placing it in “special wallets” and by putting private keys in “secure storage” with limited access. It also says that private keys for wallets are renewed every month, with balances checked every second. Yet it doesn’t define what “secure storage” or a “special wallet” is, or whether your collateral is protected by any type of insurance.
Regardless of any security protocols in place, you must transfer ownership of your cryptocurrency to Guarda. You’re trusting that Guarda will keep your collateral safe during the term of your loan. This means if Guarda or CoinRabbit goes out of business, you’re at risk of losing your collateral.
How to apply
To apply for a Guarda loan, you need a Guarda Wallet. Go to the website and visit the loans page for directions on how to create a new wallet. You can apply for a loan from the interface.
How repayments work
Guarda doesn’t say how repayments work, but CoinRabbit’s site states that after you repay your loan in full, you get your collateral back within five to 10 minutes.
The repayment amount is made up of the total loan amount borrowed plus the accumulated monthly APR. The company doesn’t charge trading fees on loans, but if you pay off your loan within 30 days, you’re charged a $50 to $100 prepayment fee.
What happens if my crypto drops in value?
If your loan reaches any of three limit zones, the platform immediately notifies you by email and text, according to Guarda’s loan provider, CoinRabbit. If you don’t add more collateral to your loan or pay it off before the LTV hits 45%, your collateral is liquidated and your loan closed.
Guarda’s limit zones or margin calls depend on the percentage your collateral has dropped:
- 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
Note that the minimum margin call threshold at Guarda starts at 10%, which is low compared to some other lenders. It gives you an earlier heads-up if the price of your coins begins to drop.
Is borrowing from Guarda safe?
No crypto provider, including Guarda, is CDIC insured, which means that your money isn’t insured from loss should the company go under. Regarding how your collateral is protected, the Guarda website states the company has a partner that “carefully keeps it safe for the whole period.”
There’s no further explanation of what this means or what happens to your collateral if Guarda or CoinRabbit goes out of business. We strongly suggest you read the terms of use and confirm information with Guarda if you’re concerned about protecting your assets.
Guard reviews are mostly positive, but many reviews look incentivized
Guarda earns a 4.7 out of 5 on Trustpilot from over 1,255 customers as of February 2022. More than 80 percent of reviewers call the company “excellent,” while 5% give it a “bad” rating. But like many crypto company reviews, many of the positive reviews look like customers may have been given bonuses in exchange for positive reviews.
While fewer in number, negative reviews look more authentic, with some customers complaining about contracts being hacked and other glitchy problems with the Guarda app interface. To its credit, Guarda responds quickly to customer complaints online.
Alternatives to Guarda crypto loans
Guarda crypto loans are an option if you want to HODL your crypto and not incur capital gains tax by selling.
If you don’t already own crypto or want to take on the risk associated with crypto loans, consider getting money through more traditional methods:
- Low APR credit card. Transfer existing balances or make new purchases without attracting a lot of interest for a set amount of time, usually 6 to 9 months.
- Home equity line of credit (HELOC). If you have equity in your home, you can tap into it with a revolving credit line that you can use for a set amount of time, usually 10 years.
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