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SALT Lending crypto loans review

Alternative financing that lets you tap into the value of your crypto without having to sell it.

SALT Lending offers a way for you to convert the value of your crypto into cash without having to sell them and incur capital gains tax. Note: SALT business loans are currently available in Canada but personal loans are not.

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Details

Accepted CollateralBTC, ETH, LTC, BCH, PAX, PAXG, USDC, TUSD, SALT
Issued CurrenciesUSD, TUSD, USDC
Interest Rate3.50%-9.99%
LTV30%-70%
Loan Amount$5,000 - $1,000,000
Loan Term3 months - 12 months
Min Margin Call Threshold75%
Liquidation Threshold90.91%

Pros

  • Accepts multiple cryptocurrencies as collateral.
  • Advertises insurance of up to $10M in the event of a breach.
  • No credit check or income history required.
  • Stackwise program lets you lower your interest rate or receive crypto back rewards.
  • Business loans available in Canada.

Cons

  • Limited online customer reviews, and hard to reach phone support.
  • Past customers complain of liquidated collateral without adequate notice.
  • Monthly payments are required during the term of the loan.
  • You must turn your collateral over to SALT.
  • Personal loans not available in Canada.

Our take on SALT Lending crypto loans

SALT Lending accepts a wide range of cryptocurrencies, possibly appealing to those who own multiple coins they want to borrow against. You can also lower your interest rate or receive crypto back through its Stackwise program, although joining the program may trigger a taxable event. You might get a better rate by shopping around.

You won’t find many user reviews online, though two reviewers on Trustpilot mention their collateral being liquidated without adequate notice. We spoke with a company rep, who told us that SALT Lending now offers a stabilization option — which converts your crypto into stablecoin if your loan reaches 90.91% LTV. By converting your assets to stablecoin, your account is effectively frozen, giving you more time to fund your account and avoid immediate liquidation at 90.91% LTV.

Be aware that if you get a loan with SALT, the company acts as a custodian for your crypto collateral. This means SALT takes over ownership of your crypto and that you’re trusting the company to keep your assets safe during the term of the loan.

Read the terms of use and confirm information with the company if you’re concerned about protecting your assets.

How much can I borrow?

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SALT business loans are available in Canada. SALT personal loans are currently not unavailable to Canadians.

Loans start at $5,000 and SALT Lending’s online loan calculator tops out at a $1,000,000 maximum, though the company suggests reaching out to its lending team for larger loans. Ultimately, the maximum you can borrow largely depends on the crypto assets you’re willing to pledge as collateral.

SALT Lending rates and fees

SALT’s interest rates start at 3.50%-9.99%. However, you can lower your rate with its Stackwise program. And you can get an additional 2% rate reduction on top of that if you own its native coin SALT.

How the Stackwise program works

SALT’s Stackwise program gives you back a portion of your monthly loan payment in the form of Bitcoin, Ether or USD Coin — or you can put the rewards towards lowering your interest rate instead of receiving crypto in your account.

For example, on a 9.99% loan at 30% LTV, you can get your rate down to 5.5% if you choose to lower your rate instead of receiving crypto back. And if you own SALT coin, you can lower it even further to 3.5%.

Loans originating in 2022 are automatically eligible for the Stackwise program, but it can be added to older loans by contacting the company. Because joining the program can trigger a taxable event, consult with your financial advisor before signing up for the program.

What crypto can I pledge as collateral?

SALT Lending says that it accepts BTC and eight altcoins — including its native coin SALT — as collateral:

  • BCH
  • LTC
  • PAX
  • PAXG
  • SALT
  • TUSD
  • USDC

SALT Lending pays out its loans in USD and the stablecoin USDC.

How fast can I get my money?

SALT Lending says it funds loans in under two business days after all steps are completed, but at least one Redditor reports receiving funding in about four days.

How is my collateral protected?

SALT Lending says that it holds your collateral in a designated cold-storage account offline. A representative told us the collateral account protects you from losing your assets if the company goes bust, because assets held in the collateral account aren’t the property of SALT and aren’t subject to claims of creditors if the company can’t pay its debts. However, this statement doesn’t guarantee that you won’t lose your assets should the company become insolvent.

SALT Lending also advertises cyber insurance that covers your collateral for up to $10 million in the event of cyber breaches, extortion, technology errors or failures and loss or theft of data assets. But be aware that this kind of coverage can be rendered meaningless if the company goes out of business.

As with all crypto loans, your assets with SALT Lending are not insured by the CDIC. You are always at risk of losing money if the company becomes insolvent or if the value of your assets fall and your LTV rises to a level that requires liquidation before you can correct the situation.

Talk to a legal or financial advisor to confirm these claims if you’re concerned about losing your collateral.

What else should I know?

SALT Lending was founded in 2016 by real estate executive Blake Cohen and Caleb Slade. It’s grown from a crypto-backed lender to develop multiple products like Fireblocks, a platform focused on helping businesses to support digital assets.

In 2020, SALT Lending reached a settlement with the Securities and Exchange Commission that required the company to offer refunds to investors of its initial coin offering — or ICO — that raised $47 million. The SEC ruled that SALT Lending violated regulations by not registering the sale beforehand. The settlement means that SALT did not have to agree or deny the SEC’s findings.

Steps to apply for a SALT Lending loan

To apply for a SALT loan, go to the website and set up a profile. Choose your loan preferences and submit your loan request to SALT. If approved, you’ll need to deposit your crypto to your SALT collateral wallet and wait for funding, which typically takes one to two business days according to the company.

How repayments work at SALT Lending

With SALT Lending, you make repayments until the loan term is up and payment is made in full. You choose between monthly principal-and-interest (P&I) and interest-only payments that can be made through a wire transfer, ACH, stablecoin or autocrypto. Autocrypto payments use a portion of your cryptocurrency collateral as payment.

If you miss a payment, SALT Lending automatically liquidates a portion of your collateral to cover the monthly payment. Keep tabs on your budget and set up autopay to avoid it.

What happens if my crypto drops in value?

SALT Lending has a clearly defined margin call process. You’re alerted at four thresholds if the value of your collateral drops based on how it affects your loan-to-value ratio — or LTV:

  • At 75%, you get an alert that your collateral is declining in value.
  • At 83% LTV, you’re asked to consider paying back a portion of the loan or depositing more collateral.
  • At 88% LTV, you’re warned that your collateral is at risk of being sold.
  • At 90.91% LTV, SALT sells or liquidates a part of your collateral required to reach the agreed-on LTV.

Despite these clear advertised thresholds, some SALT customers complain online about inadequate notice, resulting in their crypto being liquidated before they could stop it. With the introduction of “stabilization,” it appears customers can choose to have protection against immediate liquidation now.

Alternatives to SALT Lending crypto loans

Crypto loans may be a good option if you want to access cash or stablecoin without having to sell your cryptocurrency. Learn more about crypto loans and how you can keep your coins while leveraging them to your advantage.

If you don’t already own collateral — or don’t own enough to secure a low rate — you may be able to secure financing through more traditional methods:

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