When Does a Margin Call Start?
A margin call happens when the value of your collateral drops below the minimum required level compared to your loan balance. It's a risk control mechanism to help ensure your loan remains properly secured. When a margin call is triggered, you may be required to add more collateral or repay part of your loan. If no action is taken, your collateral may be liquidated automatically.
Flexible
Margin calls for Flexible and Stable loans are based on the Loan-to-Value (LTV) ratio and your agreed loan terms.
LTV-Based Thresholds
| LTV by Loan Terms % | Pre-Margin Call Trigger % | Margin Call Trigger % |
|---|---|---|
| 50% | 70% | 75% |
| 60% | 70% | 75% |
| 70% | 72% | 75% |
Stable Loans
Margin calls for Stable loans are based on the Loan-to-Value (LTV) ratio and your agreed loan terms.
| LTV by Loan Terms % | Pre-Margin Call Trigger % | Margin Call Trigger % |
|---|---|---|
| 95% | 96% | 98% |
Bullet Loans
For Bullet Loans, margin calls are based on actual LTV values at origination.
| LTV by Loan Terms % | Pre-Margin Call Trigger % | Margin Call Trigger % |
|---|---|---|
| 50% | 70% | 80% |
Interest Loans
Interest Loans follow a fixed margin call structure:
| LTV by Loan Terms % | Pre-Margin Call Trigger % | Margin Call Trigger % |
|---|---|---|
| 65% | 70% | 80% |
Example (Flexible Loan)
- Loan Amount: €10,000
- Collateral: 0.5 BTC
- Loan Terms LTV: 60%
- Pre-Margin Call Trigger: At 70% LTV
- Margin Call Trigger: At 75% LTV
If the price of BTC drops, causing the LTV to rise to 75%, a margin call is triggered. At this point, you'll need to either add more collateral or repay part of the loan to reduce the LTV.
Important: There is no automatic liquidation LTV threshold. A loan is only liquidated if it stays above the margin call level for 3 consecutive days. This gives you time to take action and protect your assets.
Understanding how margin calls work is essential for protecting your crypto-backed loan. Whether your loan is based on LTV or the value of your collateral, margin calls are triggered when the security of your loan is at risk.
To avoid automatic liquidation, always monitor your loan's performance and be ready to act quickly if your collateral value begins to fall. Adding more collateral or repaying part of your loan can help you stay in a safe zone and maintain full control over your assets.
If you ever have questions or need assistance, our support team is here to help you.
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