I ran 340+ scenarios across the platforms we track. The advertised rate was within 100bps of the effective APR exactly 0 times. Here is what actually goes into the true cost of a BTC loan.
What goes into the advertised rate
The advertised APR is the cost of capital — nothing else. It does not include origination fees, custody fees, annual vault fees, withdrawal fees, or the cost of the collateral lock-up during the loan term.
Real examples from the data
Unchained: Advertised rate requires a current quote. Add 2% origination fee + $250/year vault fee on a $150K loan → effective APR of ~14.2%. That is a 220bps spread on the headline number.
Figure: Advertised 8.91% interest rate. Add the 1% origination fee on a 12-month term and the all-in cost becomes 9.999% APR. The spread is smaller than Unchained's, but it still matters if you only compare headline rates.
Ledn: 10.99% advertised for sub-$250K loans. Origination fee: $0. Effective APR: 10.99%. This is actually honest — one of the few cases where the headline rate is close to the true cost.
The fee checklist
- Origination fee (one-time, 1-2% is common)
- Custody or vault fee (annual, $0-$500/year)
- Interest (ongoing, monthly or at maturity)
- Early repayment fee (varies by platform)
- Withdrawal/sweep fees (when you reclaim collateral)
How to calculate effective APR
True cost = Total interest paid + all fees, annualized over the loan term, divided by the average loan balance outstanding. For a 12-month loan with a 1% origination fee and quote-only APR on $100,000: the effective APR is closer to 13.1%.
Always run this calculation before signing. The comparison tool does it automatically — that is the primary reason it exists. For a deeper understanding of how fees affect your real borrowing cost, see our what borrowers actually pay guide.