Taking out a crypto-backed loan with Block Earner is straightforward. Managing your crypto is what separates borrowers who stay in control from those who get caught out by market movements. This guide covers how to keep your loan healthy, what happens when markets move, and how to repay your Block Earner loan when the time comes.
Key Takeaways
- Your LVR (loan-to-value ratio) moves with the crypto market, even when you are not actively managing your loan.
- Block Earner notifies you at each LVR stage via email, in-app alert, and SMS, so you are kept informed as your loan changes.
- Maintaining a buffer below the higher LVR stages helps reduce the likelihood of receiving a Default Notice.
- If your LVR reaches the Default Notice threshold, Block Earner issues a 30-Day Default Notice, giving you 30 days to restore your LVR by repaying part of your loan or adding crypto security. If no action is taken, Block Earner may sell a portion of your crypto security in line with your loan terms.
- If, during the 30-Day notice period, the value of your crypto security increases and your LVR falls below the applicable Default Notice threshold, no further action is required.
- Block Earner loans can be repaid partially or in full at any time through the app, in AUD or crypto.
If you have questions at any stage, Block Earner's team is available to help.
How to Manage Your Crypto Loan
Active loan management is about understanding the LVR stages that apply to your loan and knowing the options available to you when markets move.
Monitor Your LVR
Your LVR (loan-to-value ratio) is the key figure to track while your loan is active. It is a percentage that compares the amount you have borrowed to the value of your crypto security. As crypto prices rise, your LVR falls and your loan sits in a healthier range. As crypto prices fall, your LVR rises and your loan can move into the higher unhealthy range.
Block Earner displays your live LVR in the app at all times, so you do not need to calculate it manually. It is still useful to understand what the number means and which stage your loan is in.
For a deeper explanation of how LVR works and what the formula looks like in practice, see our guide: How LVR Works With Crypto Loans.
Understand the LVR Stages
Block Earner uses defined LVR stages so you always know where your loan stands. The thresholds depend on the crypto used as security:
Crypto Security: (BTC, ETH, WBTC)
40-50%: Healthy
50-54.9%: Attention
55%-59.9%: Repayment Notice
60%: Default Notice (30 days to manage)
XRP Security: (XRP)
25-34.9%: Healthy
35-39.9%: Attention
40%-49.9%: Repayment Notice
50%: Default Notice (30 days to manage)
To chat through these different stages, please book a call here.
Note: For customers on a bespoke contract with Block Earner, the stages above may not apply. Refer to your loan agreement for the thresholds that apply to your loan.
Prepare for Volatility
Crypto markets can move quickly. A 20% drop in Bitcoin's price over a matter of days is not unusual, and that movement pushes your LVR up in real time.
When you take out your loan, note your starting LVR and the stage thresholds that apply to your crypto security. Some borrowers choose to keep additional assets available, whether AUD or additional crypto, so they have the option to top up their security or make a partial repayment if their LVR rises.
Maintain a Buffer
Starting your loan at a lower LVR leaves more room to absorb a market drop before your loan moves into the Attention, Repayment Notice, or Default Notice stages. For example, on a BTC or ETH Line of Credit, the maximum LVR is 40% and the Healthy range sits between 40% and 50%, so borrowing below your maximum LVR increases the buffer available to you.
If your LVR is sitting close to a higher range during a period of market uncertainty, the two main options available to you are topping up your crypto security or making a partial AUD repayment. Both bring your LVR down. Which option suits you is your decision, and Block Earner's team can talk you through how each works.
How the 30-Day Default Notice Works
If your Block Earner crypto loan LVR reaches the Default Notice threshold for your crypto security, Block Earner issues a 30-Day Default Notice. You then have 30 days to repay a portion of your loan in AUD, sell a portion of your crypto security to make a repayment, or deposit additional crypto as security to restore your LVR to a healthier level.
If, during the 30-day notice period, the value of your crypto security increases and your LVR falls below the Default Notice threshold, no further action is required. If no action is taken and your LVR remains at or above the threshold after the 30-day period, Block Earner may sell a portion of your crypto security to reduce your LVR in accordance with your loan terms. This is a last resort, and the 30-day window exists specifically to give you time to act first.
If you are ever unsure about your loan position or what action to take, contact the Block Earner team directly.
How to Repay Your Crypto Loan
Block Earner loans can be repaid in full or partially at any time through the app, using AUD or your crypto security. Repayment behaviour differs slightly by product: a Line of Credit has no required monthly repayments over its 12-month term, while a Fixed Term loan requires monthly repayments throughout the term. Both can be repaid early. Here is how voluntary repayment works.
- Go to the Loans screen in the app.
- Click 'Manage loan'.
- Hit 'Repay Loan' and enter the repayment amount in either crypto or AUD. If repaying in AUD, ensure there is enough AUD in your Cash Account to make the repayment.
Step 1: Fund Your Repayment
Before initiating a repayment, make sure you have the funds to cover the amount you want to repay. You can repay in AUD or by using your crypto security. If repaying in AUD, ensure your Cash Account holds enough to cover the amount; if you need to deposit funds, you can do so via bank transfer or PayID directly through the app, allowing for standard bank processing times when transferring from an external account.
If you are repaying by selling crypto security, a Sell Crypto Fee of 0.6% (incl. GST) applies to the amount sold. For a full repayment, make sure your chosen funding source covers your outstanding loan balance plus any accrued interest and applicable fees to the date of repayment.
Step 2: Navigate to Your Loan
Log in to the Block Earner app and open your active loan from the dashboard. Your current loan balance, accrued interest, LVR, and crypto security value are all displayed here. Review these figures before confirming the repayment amount you want to make.
Step 3: Initiate Repayment
Select the repayment option within your loan dashboard. A partial repayment reduces your outstanding balance and brings your LVR down, while a ‘Close Loan’ full repayment closes the loan and releases your crypto security back to your account.
Confirm the repayment amount, review the summary, and submit. Block Earner processes the repayment and updates your loan balance. Once a full repayment is confirmed, your crypto security is released back to your Block Earner wallet. To fully close a Line of Credit facility, make sure you also select 'Close Loan' after your final repayment.
If you have any questions during the repayment process, Block Earner's support team is available via in-app live chat or through the contact us page.
Disclaimer: The information contained in this blog is general in nature and is provided for informational purposes only. It does not constitute financial, legal, or tax advice, and should not be relied upon as such. Block Earner does not guarantee the accuracy or completeness of any information presented. You should consider your own personal circumstances and seek professional advice before making any financial or investment decisions. Past performance is not indicative of future results. All investments carry risk.
Approved applicants only. Terms, conditions, fees and charges apply. Credit provided by Web3 Loans Pty Ltd ACN 668 516 952 and managed by Web3 Ventures Pty Ltd trading as Block Earner (ACN 655 090 869) under Australian Credit License 542689. Winner of 2024 Finnies Excellence in Blockchain/Distributed Ledger, 2024 Blockies Financial Services Innovator of the Year, and 2025 Finnies Excellence in Web3 (Blockchain or Crypto). Winner of the 2024 WeMoney Lending Innovation of the Year award for our Crypto-backed Loans. NB: These awards are for Block Earner's full suite of products and not specifically the Crypto-Backed Loans product.
