Credit

What a bank does here: it checks your credit score, sets a rate and lends you money, often against your house or car. What you do instead: you can post crypto as collateral and borrow stablecoins against it — no credit check, often in minutes. The price of that speed is liquidation: if your collateral falls far enough, it is sold automatically.

Key concepts

• Loan-to-value (LTV). Loan size divided by collateral value. Borrow $5,000 against $10,000 of BTC and your LTV is 50%.
• Liquidation threshold. The LTV at which the lender or protocol sells collateral. For example, Coinbase’s Morpho-based loans liquidate at 86% LTV and Ledn at 80% (as of late September 2026).
• Health factor. DeFi’s version of the same idea: above 1 is safe, at or below 1 you can be liquidated.
• Variable vs fixed rates. Most DeFi loans float with utilization. Fixed-rate options are newer and usually cost more.
• Custodial vs DeFi lenders. A custodial lender holds your collateral; a DeFi protocol holds it in a smart contract. Different risks, both real.

Estimate a loan

Plug in a loan amount and rate to see what interest costs over time. The default rate is a placeholder — real rates are variable and differ by lender.

See how close you are to liquidation

Drag the price slider to see how a market drop moves your LTV and health factor. Many careful borrowers keep LTV well below half of the liquidation threshold.

Check your understanding

Guides in this track

• Crypto-Backed Loans: Coinbase vs Ledn vs DeFi
• How Liquidation Works: LTV and Health Factor in Plain English
• Buy, Borrow, Die Explained (and Its Risks)

Education only, not financial advice. Rates change and are not guaranteed. CoinPayBank is not a bank.