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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.

If you own cryptocurrency, Denver-based startup SALT Lending offers a way for you to convert the value of your coins into cash without having to sell them and incur capital gains tax. A credit check isn’t required, although SALT requires government-issued ID to verify your identity to get a loan.

Pros

  • Accepts multiple cryptocurrencies as collateral.
  • Collateral is held in a designated account using a subsidiary SALT Platform.
  • Advertises insurance of up to $10M in the event of a breach
  • No credit check or income history required.

Cons

  • Limited online customer reviews, and hard to reach phone support.
  • Past customers complain of liquidated collateral without adequate notice.
  • Lowest rate requires 30% LTV.
  • Monthly payments are required during the term of the loan.
  • You must turn your keys over to SALT.

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. The company appears to offer competitive rates compared to other crypto lenders, though the lowest rate requires 30% LTV, which means putting up a large amount of money compared to the size of your loan. 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 stabilization — which converts your crypto into stablecoin if your LTV exceeds 90.91%. 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.

Also be aware that if you get a loan with SALT, the company acts as a custodian for your collateral wallet. It means that SALT owns the keys to your wallet while the loan is active.

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

How much can I borrow?

Loans start at $5,000 and SALT Lending’s online loan calculator tops out at a $1 million 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.

Rates range from 5.5% to 10.5%, depending on the LTV. And the lender advertises a 2% rate reduction if you own its native coin SALT.

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 that the collateral account protects you from losing your collateral if the company goes out of business, because assets held in the collateral account aren’t the property of SALT and aren’t subject to claims of creditors if the company is no longer able to pay debts.

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. 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 FDIC. You are always at risk of losing money 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% LTV, 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 have protection against immediate liquidation now.

SALT Lending reviews are sparse

We found only a handful of online reviews about SALT Lending on Trustpilot as of January 2022. Of the three customers who left reviews, two were negative, reporting it was hard to rescue collateral when prices dropped. However, with SALT introducing “stabilization,” this may not be an issue in the future.

The SALT crypto loans app got a favorable 4.6 out of 5 star rating on Google Play, however it’s hard to tell if some of the positive reviews are legitimate because they’re not very descriptive or in-depth. For example, saying an app is “very good” or “amazing” does not provide any real information about the user experience.

SALT Lending isn’t accredited with the BBB and has no reviews or complaints listed on the site as of this writing.

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:

Disclaimer: This information is not financial advice or an endorsement of cryptocurrency or any specific provider, service or offering. Cryptocurrencies are highly volatile and high risk. Do your own research and seek financial advice before buying. And make sure the provider you're interested in is available in your state.

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