Coinbase Loans [Complete 2022 Guide]

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Coinbase is a cryptocurrency exchange platform that makes it easy to buy, sell, and trade crypto.

One of the hottest new products offered by the company has been Coinbase loans. It is a loan program available to any verified user in the United States who has an active Coinbase account and can create a first-time loan as short as $500.

To get a personal loan, you must be a U.S. resident with a verifiable U.S.-based bank account or credit card (eCheck excluded), 18 years of age or older, have a job with verifiable income, have gone through their Identity Verification process, and have linked an external account to their Coinbase accounts such as a bank account or credit card – none of which are currently supported by Coinbase loans.

This article will show you why it’s better to get a personal loan from Coinbase, how to get approved, and how much money you can borrow.


In This Post:


How Do Coinbase Loans Work?

Coinbase is the only cryptocurrency exchange available to U.S. residents, so anyone looking to consolidate their cryptocurrency portfolio behind one account can use Coinbase. The company also provides a service called Coinbase loans.

Once you have been approved for a first-time loan from Coinbase, you can purchase Bitcoin or Ethereum with your credit card and then convert your crypto holdings into USD. The balance of your USD holdings must be more than $1,500 for the transaction to be approved, but it is possible to get up to $50,000 if you have more than 12 months left on your loan term and are in good standing with the company (meaning they would like you as a customer going forward).

You can then use your USD to purchase other cryptocurrencies with Coinbase. The loan you get will be based on the value of your crypto portfolio at the time of the loan request. When you have paid off your debt, you can use your USD to purchase other cryptocurrencies or withdraw everything at once and use it as cash to pay off your other debts.

2 Things You Should Know Before Getting a Loan From Coinbase

Although this isn’t a traditional loan where you have to secure an asset with the balance, we believe it’s still important to know what’s going on before applying for a personal loan from Coinbase. Here are two things you should know:

  1. Without Bitcoin, there would be no Coinbase loans. The credit-scoring company that underwrites the program created it specifically to help people who want to invest in Bitcoin but don’t have enough money to buy it with a credit card. Without the fees associated with a traditional credit card, a loan from Coinbase could help people who lack sufficient credit history and income to buy Bitcoin.
  2. You can’t refinance your loan with Bitcoin. Suppose you decide to pay off your debt early. In that case, you will forfeit the remaining borrowed money in the form of interest and early-termination fees, which is why the maximum amount you can borrow is one USD for every $4,000USD value of your portfolio – far below the $50,000 maximum permitted by most lending institutions due to FDIC/OCC regulations.

How Can I Get a Coinbase Loan?

The way to get a Coinbase loan is simple – follow these steps:

  1. Create an account with Coinbase.
  2. Go to the Coinbase loans page and fill out an application.
  3. Log in and check your account to verify your U.S. residency and address, as well as obtain your credit score and income details.
  4. Create a deposit to increase the amount you can borrow if necessary (for example, if you want to borrow more than $50,000USD).
  5. Once the funds have been deposited into your account, use them to purchase Bitcoin or Ethereum using Coinbase or any other supported cryptocurrency exchange (the process is explained in detail here ).
  6. Buy crypto for your loan on Coinbase and convert it to USD with your external account, which then goes into your loan account on the site to pay back the bank/credit card you used to make the initial deposit (which is hardly ever more than $1,500 – that’s $4,000USD total).

If you want a personal loan from Coinbase with lower rates or longer terms than their standard loan is offering, you can request a “short term” or “long term” loan, and those will come directly from another bank at lower rates with long-term terms of up to 5 years.

What is the Coinbase Loan Interest Rate?

The interest rate for a loan from Coinbase is 8 %, depending on your creditworthiness and how much money you need. In all cases, the date from which interest will be charged is the day after your request is approved. You can also make your repayments in any time frame you choose, but be aware that if you make all payments after 4 pm, they will not process until at least the following business day.

How Much are Coinbase Loan Fees?

Coinbase charges nothing for the first $1,000 you borrow, but the interest charges for all loan amounts and for every day you miss a payment (called “late fees”) are as follows:

Amount Borrowed Loan Interest; (0-99.99 USD 0.25%) (1,000-2,499.99 USD 2.49%) (2,500 and above USD 5.99%). It is important to note that if you make a payment after 4 pm, it won’t be credited until the next business day to process the payment.

Whenever you make monthly repayments, Coinbase will charge USD 0.25 per month, which goes towards your total interest at a rate of 0.25% per month. If your loan is due on the 15th, but you can’t pay in full until the 21st, your interest due will be charged from the 16th until you have fully repaid the loan (including principal and interest).

What are Coinbase Loan Limits?

Coinbase limits are the same as the limits any other personal loan has. Each state sets different standards for this, but generally, you must have a good credit history and enough income to support the loan amount. The maximum amount you can request is USD 50,000 or your portfolio value, whichever is lower. There are no minimums for applying – that is, you can apply and get approved for just 100USD if your portfolio is worth 2 million USD – though it’s unlikely that Coinbase will approve an application of such a small amount since it would be unprofitable for them.

However, even if you don’t meet these rather high limits, there are still options available in other states. Here’s what we suggest:

  1. Get credit cards from a bank in your area, then transfer the funds you need to buy crypto using Coinbase or another supported exchange.
  2. Transfer the money from your credit card to your loan account on Coinbase, then buy Bitcoin or Ethereum using Coinbase or any other supported platform.
  3. Use your USD to buy cryptocurrency of your choice on an exchange that supports cash deposits like Gemini or GDAX and sell it for a fiat currency (wherever you would normally get money with a credit/debit card).

How Can I Pay My Coinbase Loan?

Paying back your loan means withdrawing the USD from your account and depositing it into your bank account or using a credit/debit card to transfer funds. If you pay back your loan early and have a negative balance, Coinbase will charge you an early termination fee equal to 10% of the negative balance.

To pay back your loan, follow these steps:

  1. Go to the Account section and click the “Bank” button.
  2. Make a transfer from your Coinbase account to your bank account. You can do this multiple times as many times as you need until the balance is 0.
  3. Go to the Account section and click the “Credit Card” button to pay your loan with a credit or debit card.

 The time it takes to get your money from Coinbase is dependent on whether you’re paying your loan back early or waiting until it’s due. If you’re paying back within two business days after requesting, you’ll have your money in about four days (including weekends). However, if you’re making a “normal” repayment, it will take about ten business days to transfer the money.

How Can I Contact Coinbase Customer Service?

If you need any help from Coinbase, you can reach them via email with “coinbase loan” in the subject line to [email protected]. Note that customer service replies can take up to 24 hours. You can also call them on their toll-free number at (888)-908-7930.


Wrapping Up

Coinbase offers a loan service in USD. The fees start at 0.25% and go up to 20% for late payments or early terminations. They have a limited loan amount for your entire portfolio or whatever is lower, which includes the state you are applying from. It is important to note that if you make a payment after 4 pm, it won’t be credited until the next business day to process the payment.

Coinbase aims to be a bank for crypto, so they control the private keys for your money. They do not offer loans in crypto unless you have a very large portfolio (which we suggest hedging). There are no minimums or maximums, but if you have less than $1,000 in the Coinbase account, it will raise questions about why you’d need that much crypto. One can sell up to 100 BTC. To do this, you will need to be approved in the Coinbase loan process and have a USD balance of at least $5,000 in your USD bank account.

Payment methods are the same as any other personal loan. You can pay back your loan early, but you will be charged a fee equal to 10% of the negative balance.

The biggest advantages of Coinbase loans are the low service fees and instant availability of funds. The disadvantage is that they hold onto your private keys, so if there’s a hack, then you’re out of luck as well. Exchanges also don’t have great track records regarding security, and hacking cases have occurred in the past. But overall, Coinbase does a good job on customer service and protecting your money.

References

  1. https://www.coinbase.com/borrow

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