pledgeHow a Bitcoin-backed loan actually works: 5 steps, timing, and the checks before you start
10 min read · Updated April 2026
Getting a Bitcoin-backed loan is operationally simple: size the loan, narrow the eligible workflow, do KYC if needed, send collateral, receive funds. The whole process ranges from under 1 minute for eligible existing Xapo members to 5 business days (Unchained). APRs range from 6.5% (Lava) to 11.49% (Ledn at the smallest loan tier). Traditional credit scores are rarely the gating factor, but KYC and collateral requirements still are.
You don't sell your Bitcoin. You post it as collateral and borrow against it. The workflow is the easy part. The real decision is how much liquidation room you want, whether you are comfortable giving up custody, and which structures even fit your state and loan size. Use the steps below as an operating checklist, then move into the loan hub, safety guide, or methodology before treating one lender as the answer.
Independence: Pledge currently has no affiliate or referral relationships with any lender. If a paid relationship is ever added, it will be disclosed inline where it appears. Learn more
Step-by-step: from Bitcoin to cash in your bank
Decide how much you need and check your BTC
Lenders let you borrow 40–70% of your Bitcoin's value (the LTV ratio). With 1 BTC at ~$100,000, a 50% LTV gets you ~$50,000. Arch offers up to 60% LTV, SALT goes to 70%, but Xapo caps at 40%. Figure, Ledn, and Unchained all sit at 50%. YouHodler advertises loan-form LTV — but a 1.5% BTC drop triggers liquidation at that tier.
Narrow the eligible workflows by state, size, and custody model
Minimum loans range from $100 (Nexo, YouHodler, Lava) to $150,000 (Unchained). Ledn, Figure, and Arch start at $500–$5,000. If you're in New York, the current CeFi options in our dataset are Ledn, Unchained, Figure, and Arch Lending; Nexo, YouHodler, Strike, and SALT Lending exclude NY residents. Texas? Figure blocks TX residents. Check our full state-by-state breakdown before applying.
Complete KYC — government ID, proof of address, selfie
11 of 11 CeFi lenders in our tracked dataset require KYC. Faster retail workflows like Nexo and Ledn typically clear quicker than institutional setups such as Unchained or SALT. The no-KYC options in our tracked dataset are Lava, Aave, Maker (Sky) — all DeFi workflows rather than centralized underwriting. Credit scores are usually not the gating factor, but some lenders may still run sanctions or fraud screening or ask for extra source-of-funds documents on larger loans.
Transfer your BTC as collateral
You send BTC to the platform's custody address. With Unchained's multi-sig, you create a collaborative vault where you hold 2 of 3 keys. With Ledn or Arch, your BTC goes to BitGo or Anchorage custody. With Lava, custody is unresolved — it marketed a self-custody smart contract, but reporting (Bitcoin Magazine, Nov 2025) indicates a move to custodial cold storage, so you cannot assume you keep your keys.
Receive funds — anywhere from 1 minute to 5 days
Eligible existing Xapo members can often receive funds in under 1 minute after approval. Nexo and YouHodler are same-day once KYC is complete. Ledn median funding time is 9.7 hours. Figure's tracked BTC product can often fund same day. Arch takes 1–3 days. Unchained takes 3–5 business days (manual underwriting). Lava settles on-chain in seconds.
How long does a Bitcoin loan take to fund?
Funding speed depends entirely on the platform. Xapo completes loans in under 1 minute because you're already a bank customer. Lava settles on-chain in seconds. Nexo and YouHodler are same-day after KYC. Ledn averages 9.7 hours. Figure funds same-day. Arch takes 1–3 business days. Unchained takes 3–5 days because they manually underwrite each loan.
| Lender | Funding Speed | KYC Speed | Total Time* |
|---|---|---|---|
| Xapo Bank | < 1 minute | ~10 min | ~10 min |
| Lava | Seconds | None | Seconds |
| Nexo | Same day | ~10 min | Same day |
| YouHodler | Same day | ~15 min | Same day |
| Figure | Same day | ~15 min | Same day |
| Ledn | ~10 hours | ~10 min | ~10 hours |
| Arch | 1–3 days | ~1 day | 2–4 days |
| SALT | 1–3 days | ~1 day | 2–4 days |
| Unchained | 3–5 days | ~1–2 days | 4–7 days |
*Total time from starting the application to having cash available. Assumes BTC is ready to transfer. Actual times vary.
What do you need to qualify for a Bitcoin loan?
Traditional credit scores are rarely the gating factor here, and most platforms skip employer calls or pay stubs. The core requirements are BTC collateral and identity documents:
- ✓Government-issued photo ID (passport or driver's license)
- ✓Proof of address (utility bill or bank statement, less than 90 days old)
- ✓Selfie photo for identity verification
- ✓Bitcoin ready to transfer (minimums range from $100 to $150,000)
- ✓Bank account to receive loan proceeds
Lava is the exception — it requires zero documents. It's a DeFi protocol that uses smart contracts instead of KYC. The trade-off: our safety score rates Lava at 3.39/10 vs 9.02/10 for Unchained, because smart contract risk replaces counterparty risk.
Every Bitcoin lending platform compared
Here's the complete comparison of all 15 platforms — sorted by our safety score. Higher scores mean your Bitcoin is more likely to be there when the loan ends.
| Platform | Safety | APR | Min Loan | LTV | Custody |
|---|---|---|---|---|---|
| Unchained | 9.02/10 | 12% + fees (~14.2% eff.) | $150,000 | 50% | Multi-sig (you hold keys) |
| Xapo Bank | 8.83/10 | 10.5% | $1,000 | 40% | Custodial (licensed bank) |
| Ledn | 7.41/10 | 9.25–11.49% | $500 | 50% | Custodial (BitGo) |
| Arch Lending | 7.03/10 | 7.25–10.49% | $5,000 | 60% | Custodial (Anchorage) |
| SALT Lending | 5.53/10 | 7.49–10.5% | $5,000 | Up to 70% | Custodial (BitGo) |
| Nexo | 5.25/10 | quote-dependent* | $100 | 50% | Custodial |
| Figure | 7.1/10 | 8.91% rate (9.999% eff.) | $500 | 50% | Custodial (MPC) |
| Lava | 3.39/10 | 6.5–7.5% | $100 | 50% | Custody unresolved |
| YouHodler | 4.02/10 | 10.99–19.02% | $100 | Quote form | Custodial |
*Nexo's public from-rate requires a live account quote. Actual pricing depends on loyalty tier, collateral mix, jurisdiction, and account terms.
How much does a $25,000 Bitcoin loan actually cost?
Let's say you have 1 BTC (~$100,000) and want to borrow $25,000 at 25% LTV. That's well within every platform's limit. Here's what you actually pay over 12 months at each lender:
| Lender | Stated APR | Interest (1 yr) | Origination Fee | Total Cost |
|---|---|---|---|---|
| Lava | 6.5% | $1,625 | $0 | $1,625 |
| Figure | 9.999%* | $2,228 | $250 | $2,478 |
| Ledn | 11.49% | $2,873 | $0 | $2,873 |
| Arch | 10.49%† | $2,250 | $373 | $2,623 |
| SALT | 8.75% | $2,188 | $0 | $2,188 |
| Xapo | 10.5%‡ | $2,625 | $0 | $2,625 |
| Nexo | Live quote§ | Varies | $0 | Varies |
| Unchained | 12% + fees | $3,000 | $750 | $3,750 |
*Figure: 8.91% interest rate + 1% origination fee = 9.999% effective APR.
†Arch: 10.49% APR is Arch's published sub-$250K tier (9.00% interest + 1.49% origination fee, folded into APR). Larger loans step down the ladder to a 7.25% floor for $5M+.
‡Xapo: Variable rate tied to Fed Funds. $1,000/year membership fee not included (separate).
§Nexo: final APR requires a live account quote and depends on loyalty tier, collateral mix, jurisdiction, and account terms.
How the workflow branches once the basics are clear
The guide can tell you how the process works, but it should not pretend every borrower has the same best answer. Use these as starting research paths based on the main constraint you are actually solving for.
If custody control is the main constraint, start with Unchained
Multi-sig custody where you hold 2 of 3 keys. No rehypothecation. Operating since 2016 with a clean record through the 2022 cycle — one of the longer track records in BTC lending we track. The tradeoff is a $150K minimum loan and ~14.2% effective APR after fees, so this is a starting point for safety-first borrowers, not a universal answer.
If speed matters most, start with Xapo Bank or Nexo
Eligible existing Xapo members can often receive funds in under 1 minute after approval (membership costs $1,000/year). Nexo is same-day after KYC with no membership fee. Both are custodial — you give up your keys. Read those as fast-turnaround workflows first, then verify the custody and cost tradeoffs in the full review.
If low cost is the first filter, separate Lava from Figure before comparing them
Lava has the lowest published BTC APR we track but its custody model is unresolved (reportedly custodial as of Nov 2025) (3.39/10 safety score). Figure's 8.91% rate becomes 9.999% APR after the 1% origination fee. One is a DeFi workflow, the other is a custodial fixed-term loan, so the structure matters at least as much as the headline number.
If flexibility matters more than absolute rate, start with Arch
Arch offers the clearest institutional-style BTC revolving line of credit we track — draw $5K today, repay it next week, draw $10K the week after. Nexo also offers a revolving credit line, but Arch pairs that flexibility with 60% LTV, Anchorage custody, and no rehypothecation. Pricing is genuinely competitive: a typical sub-$250K borrower pays ~10.49% APR (origination fee included), and the published ladder steps down to a 7.25% floor on $5M+ loans — so Arch wins on both workflow fit and rate.
What can go wrong after you get the loan?
The #1 risk is liquidation — if BTC drops enough, the lender sells part of your collateral to maintain the LTV ratio. At 50% starting LTV with Ledn, you get margin-called when BTC drops 28.6% (LTV hits 70%) and liquidated at a 37.5% drop (LTV hits 80%). At Arch's 60% LTV, margin call hits at a 25% BTC drop. Unchained gives you 24 hours to fix it — most platforms don't.
The #2 risk is platform insolvency. Celsius, BlockFi, and Voyager all failed in 2022. Borrowers who had collateral on those platforms lost access to their BTC for months. This is why custody model matters: Unchained's multi-sig means they can't freeze your keys even if they go bankrupt.
See exact liquidation triggers for every lender at -10%, -20%, -30% →
Bottom line
The process is straightforward, but the timeline is not one-size-fits-all: faster retail KYC can clear in minutes, while institutional or multi-sig setups can take days. Collateral transfer is still a standard Bitcoin transaction, and funding ranges from seconds to nearly a week. The real decision isn't just "how do I get a loan?" It is which custody, liquidation, and fee structure you are willing to live with once the cash lands.
If you already know the main constraint, use that to choose the next research path: custody-first borrowers should start with the safety guide and Unchained's structure, speed-first borrowers should read the Xapo or Nexo reviews, and price-first borrowers should read the cost guide before assuming the lowest headline number wins.
Keep the next step in the research flow, not the shopping flow
- Open the loan hub if you still need to sort rate, custody, and workflow fit together
- Read the safety-first guide if trust and collateral protection are the real blockers
- Use methodology when you want to understand what Pledge is actually measuring before narrowing the field
Go to the useful screen
Continue with the tool or guide that matches the question you just narrowed.