pledgeSmall loans
Fees can dominate the real APR.
What Bitcoin Borrowers Actually Pay
10 min read
Cost decision
Use effective APR when fees or short terms matter.
A low quoted rate can lose once origination fees, short duration, and minimum-loan friction are added back in.
Large loans
Quoted APR becomes more representative.
Short terms
One-time fees annualize hard.
Evidence
Why trust this view
Verification
Last checked
June 21, 2026
Cost framing is tied to the current lender dataset.
Coverage
15 platforms
Scenarios span loan size, duration, fees, and LTV tiers.
Primary use
All-in cost check
Treat headline APR as the start, not the final cost.
Next product step
Compare my loan
Move to compare after cost still works.
Boundary
Estimate only
Provider quotes and fee schedules can change.
I ran 576 scenarios across 15 platforms: different loan amounts, LTV tiers, and loan durations.
The pattern is simple: what borrowers see advertised and what they actually pay are often two different numbers.
The Problem with Stated APR
Lenders advertise headline rates. But effective APR is what matters. Origination fees, term length, and compounding all affect your true cost of borrowing.
Here's a simple example: You borrow $100,000 at 11% APR for 12 months. The stated cost is $11,000 in interest. But if there's a 0.5% origination fee, your effective cost is $11,500 — or an effective APR of 11.5%.
The math
$100K loan at 11% for 12 months = $11,000 interest
+ 0.5% origination = $500
Total cost: $11,500 = 11.5% effective APR
The difference compounds with shorter terms. A 3-month loan at 11% with 0.5% origination? Your effective APR jumps to over 13% because you're paying that origination fee upfront but only holding the loan for a quarter.
Effective APR by Loan Size
After running scenarios across platforms, one pattern became clear: loan size matters more than platform choice for most borrowers. Here's the data for 12-month loans:
| Loan Amount | Best Rate | Effective APR | Platform |
|---|---|---|---|
| $10K | 10.99% | ~10.99% | Ledn |
| $50K | 10.99% | ~10.99% | Ledn |
| $100K | 10.99% | ~10.99% | Ledn |
| $250K | 10.49% | ~10.49% | Ledn |
| $500K | 9.99% | ~9.99% | Ledn |
| $1M | 9.99% | ~9.99% | Ledn |
Key insight
The 0.50% rate drop from $100K to $250K represents ~$1,250 in annual savings on a $250K loan. That's real money.
Effective APR by Loan Duration
This is counterintuitive for many borrowers: origination fees hurt short-term loans disproportionately. The same 0.5% fee hits harder when you're only borrowing for 3 months versus 24 months.
| Duration | Stated APR | Origination | Effective APR |
|---|---|---|---|
| 3 months | 10.99% | 0% | ~10.99% |
| 6 months | 10.99% | 0% | ~10.99% |
| 12 months | 10.99% | 0% | ~10.99% |
| 24 months | 10.49% | 0% | ~10.49% |
Counterintuitive finding
A 3-month loan at 10.99% APR with no origination fee from Ledn gives you a straightforward 10.99% effective APR. Ledn stands out for having no origination fee at all, making their advertised rate much closer to what you actually pay compared to competitors that charge 1–2% upfront.
LTV Impact on Capital Efficiency
LTV doesn't just affect your liquidation risk — it affects your effective cost per BTC borrowed. Higher LTV means more borrowing power per dollar of collateral, but it also means less buffer before liquidation.
At 25% LTV
You need $400K in BTC to borrow $100K. The opportunity cost of locked collateral is significant — your BTC sits idle while you service the loan.
At 50% LTV
You need $200K in BTC to borrow $100K. More capital-efficient — you're putting up half the collateral for the same loan amount.
The liquidation buffer tradeoff
Higher LTV = less room for BTC price drops before liquidation. At 50% LTV, BTC only needs to drop about 9% from your entry price before you hit 55% LTV. At 25% LTV, BTC can fall roughly 54.5% before reaching that same 55% LTV. Actual margin-call and liquidation thresholds vary by lender, but the core trade-off is the same: lower starting LTV buys dramatically more room.
Hidden Costs Nobody Talks About
The headline APR and origination fee aren't the end of the story. Here's what else you might pay:
Wire transfer fees
$15-25 per wire. Most platforms charge this for deposits and sometimes withdrawals. ACH is often free but slower.
Early repayment penalties
Some platforms charge fees if you pay off your loan early. Always ask before signing.
Insurance requirements
Custodial platforms may require you to insure your collateral. This adds cost that's rarely mentioned upfront.
Account maintenance fees
Rare but exists. Some platforms charge monthly fees for accounts below certain thresholds.
The Decision Framework
Based on 576 scenarios across 15platforms, here's how to think about your choice:
Need <$100K, short term (<6mo)
Consider DeFi (avoid origination fee hit) or accept ~13% effective APR from CeFi
Need $100K-$500K, 12mo+
Ledn is almost always the cheapest option based on our data
Need >$500K
Negotiate directly — both platforms have enterprise desks and will customize rates for large borrowers
NY resident
Unchained is one of the clearest institutional fits for NY borrowers — it serves NY while many competitors don't
Prioritize custody
Unchained's multi-sig structure justifies a ~1% rate premium for large borrowers who want self-custody
Related research Borrower-cost follow-ups Liquidation math → BTC-drop scenarios →
This analysis is based on publicly available rate data and modeled scenarios. Effective APR may vary based on your specific situation, creditworthiness, and negotiated terms. Always verify current rates directly with lenders. This guide is for informational purposes only and does not constitute financial advice.