loan queries of lz lending

Loan

17 articles in this collection

How to get a loan

To start borrowing on LZ Lending, all you need is a collateral asset to secure your loan. You can never borrow more than the value of your collateral.

Further, you’ll need to complete KYC verification. It’s a fully automatic process that takes only a couple of minutes.

  1. Deposit your collateral assets to the platform.
  2. Go to Instant Loans. Choose a loan term, the quantity of crypto collateral, LTV, and therefore the amount you would like to borrow. The interest is fixed and varies for various assets and depends on the chosen LTV. Setting loan parameters, you can see available collaterals, assets, and rates. When you’re ready, click on the Get Loan Now button.
  3. Now you can find the loan issued to you in “My Loans” and can withdraw borrowed money from “My Wallet”.
  4. Repay your loan according to the repayment schedule or ahead of it if you want. We charge no penalties for early repayment.
  5. Once the loan is fully repaid, your collateral funds become available for withdrawal in My Wallet.

Can I also borrow Bitcoin and other cryptocurrencies?

You can borrow BTC, ETH, XRP, BCH, LTC, USDT, TUSD, USDC and DAI.

Is LZ Lending running a credit check?

No, LZ Lending is not running a credit check.

Why doesn't LZ Lending run a credit check?

LZ Lending doesn't run a credit check since there is no personal guarantee on loan. The loan is secured by cryptocurrencies, like Bitcoin, provided by the borrower to collateralize their loan.

What is the Loan-to-Value (LTV) Ratio?

It's a common thing in asset-backed lending to secure your cryptocurrency loan with higher-value collateral (over-collateralization). A ratio of the amount of loan against the market value of the asset is a Loan-to-Value ratio (LTV).

On LZ Lending, a borrower can set up an LTV ratio in the range from 5% to 70%. Lower LTV ratio increases the chances of loan approval and lowers interest rates. In case of a market fall, your crypto isn't likely to be liquidated to secure the lender's investment. Higher LTV means that borrower will have to act rapidly in case of a terrific market situation. The good news is that LZ Lending won't give you a chance to miss out on this.

Formula to calculate LTV:

LTV = (Loan Amount) / (Collateral Value)

How do I make my loan payment?

Go to My Loans, select the loan you would like to pay and click on the "Pay" button for the instalments to be paid.

Can I get multiple loans at a time?

On LZ lending you can borrow as much as you want the number of loans at a time.

What if I forget to make the monthly payment?

LZ Lending will automatically try to deduct your payment from current balance; if your balance is 0, we will deduct it from your collateral.

What happens if the market price of my collateral changes?

If the value of your digital asset drops enough to cause a breach of the agreed-upon loan-to-value (LTV) threshold, you will be allowed to either add additional collateral or make an additional principal payment, bringing your collateral account balance back to equilibrium. If you cannot do this, your collateral will be going to liquidate.

When and how does LZ Lending liquidate collateral?

If the threshold for collateral liquidation is breached, a liquidation event is triggered, which is co-signed by other parties. Liquidation events may include fees which are passed along to the borrower.

Does using my digital asset as collateral for cash loans avoid a taxable event?

Loans with LZ Lending may trigger taxable events. We suggest consulting with a licensed tax professional to determine how your LZ Lending's loan will impact your tax reporting. You can find transaction history under Wallets tab.

Do I still own my asset?

Yes. You continue to own your asset, but your lender features interest and hypothecation against the asset until your loan matures or is paid fully.

Can I use different asset types for my loan?

Yes, you can deposit any asset or collateral that we accept on our platform.

What is the difference between principal & interest loan and an interest-only loan?

With a principal & interest loan, the borrower pays back the interest that he is paying an equivalent amount monthly until the loan matures. Early in the amortization schedule, a majority of the payment will be going towards the interest and later within the schedule; it'll go towards the principal of the loan.

With an interest-only loan, the borrower pays back the interest in the loan first. For example, in a 1-year loan, the borrower would pay only the interest of the loan for 11 payments with 1 balloon payment due for the interest and principal of the loan at the end of the loan when the loan matures.

How much can I borrow?

The amount you can borrow is only limited by the collateral you have deposited in your account.

What are the minimum and maximum amount I can borrow?

The minimum amount you can borrow is equivalent of $100.

How much time does it take to get my loan approved?

The loan approves instantly.