What Happens if I Make an Early Crypto Loan Repayment?

BlockFi clients will sometimes pay off their crypto loans early. This is called prepayment. Some clients decide to do this when another investment opportunity comes up or when the loan is no longer needed.

Additionally, once your loan is paid off, all of your crypto collateral will be released to a Bitcoin (BTC)Ether (ETH), or Litecoin (LTC)address of your choosing. Any gains from the price appreciation are the client’s to keep once the loan is paid off. Additionally, if any forks or airdrops were to occur during the loan term, we will return any additional coins that occurred during the loan term as long as our custodian supports that coin. Click here for more information about how BlockFi stores client collateral.

Some clients who inquire about prepayment are interested in starting a new loan. The best option for these clients can be to refinance their current loan with additional principal, adjustment to collateral amount, or a new loan term. This extends the value of their original collateral and helps the client with additional funding needs.

Are there prepayment penalties?

Although we lend on 12-month loan terms, some people turn to BlockFi for shorter-term funding (sometimes referred to as a bridge loan).

With BlockFi, there is no penalty for early repayment. If you payoff early, the remaining interest is forgiven. This means that you won’t be charged for the interest you would have paid if the loan had been continued through the rest of the 12-month term. Cool, right?

What is important to know about prepayments?

When considering whether to take out a loan, you should first establish what you will be using the loan for and how long you need to put the financing to work. BlockFi’s loan structure gives you the flexibility to either prepay (if your funding needs require a shorter time-frame) or refinance at the end of the term (if you require a longer time frame for your financing).

Some clients will use the funds to put a down payment or fully purchase a house while they are waiting on their mortgage to come through. They will then repay the loan with the proceeds from the mortgage. A BlockFi loan allows you obtain financing quickly and with interest-only payments. Also known as a ‘bridge loan,’ some clients will take out the loan for the amount of time it takes to close on the mortgage. Then they will and pay BlockFi back once that deal has closed.

Other clients will use the funds to help start their business. A BlockFi loan keeps monthly payments low and gives business owners the ability to pay back the loan once the business becomes profitable. Whether this happens in 6 months or 12, BlockFi’s terms can help accomplish business goals of any size.

What are the legal assurances that protect the return my collateral?

We have numerous protections set up for return of collateral. The first is the loan contract – it outlines our obligation to return collateral once the loan is paid off. BlockFi operates under Article 9 of the Uniform Commercial Code, which governs secured lending and file a UCC-1 with the state you reside in. Additionally, we work with a 3rd party loan servicer that is set up to guarantee execution of loan contracts. BlockFi is the only crypto backed lender with institutional backing from investors and institutional-quality custody partners. Click here to learn more about collateralized loans.

If you have any questions about BlockFi or how our loans work, please contact us at support@blockfi.com. We love hearing from you.

BlockFi lets you use your Bitcoin, Ether, and Litecoin to do things like buy a home, pay down debt, or even fund your business without having to sell your crypto. Start your application now and get funded in as few as 90 minutes.

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Client Testimonials


As an investor with significant crypto holdings, BlockFi gave me a valuable tool to get capital, at a fair price, without liquidating my crypto holdings. Aside from offering the best price, their approach to secure storage and thoughtful loan to value ratios gave me confidence that they were the right partner to work with for my cryptocurrency needs.


As a long term crypto holder, it’s important to me to be able to leverage my existing capital without selling. Earning monthly interest all in one place has simplified how I use my cryptoassets.


BlockFi makes it fun to be a hodler again.


We have felt strongly that this market needs access to debt beyond fragmented, short term margin trading options in order to reduce volatility, facilitate scale and put the financial infrastructure for this ecosystem on par with other asset classes. We're happy to have BlockFi as part of the Consensys family and see tremendous growth opportunities for their platform.


BlockFi was my first choice when looking to use crypto as collateral for a fiat loan. BlockFi's friendly and professional staff helped make for a very smooth process from start to finish.


It feels great to have my crypto be recognized as a real asset, which can used as collateral. I'm going to be able to immediately pay off a credit card I've been carrying a balance on.


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Disclaimer: Rates for BlockFi products are subject to change. Digital currency is not legal tender, is not backed by the government, and BIA accounts are riot subject to FDIC or SIPC protections. Security is our top priority. Please see our Vulnerability Disclosure Form and Bug Bounty Program.
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Disclaimer: Rates for BlockFi products are subject to change. Digital currency is not legal tender, is not backed by the government, and BIA accounts are not subject to FDIC or SIPC protections. Security is our top priority. Please see our Vulnerability Disclosure Form and Bug Bounty Program.
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