SALT: What To Know About Rates, Loans, & Features

What Is SALT?

SALT is a centralized crypto platform (CeFi) that allows users to borrow cash and stablecoins against their crypto holdings. When borrowers use SALT to take out a loan, their crypto is held by the platform as collateral until the loan is repaid. Users can put up any number of tokens as collateral for their loans (BTC, ETH, USDC, USDT and SALT). The platform was one of the first to offer these types of loans to users — and it has remained at the forefront of crypto-backed loans ever since. Following the FTX collapse it was one of the few crypto lenders that survive the fallout.

In order for a crypto platform to stand out, it needs to offer something unique to users — and that’s precisely what makes SALT a top competitor in the crypto lending market. Established in 2016, SALT is a one-of-a-kind crypto lending platform on which users can take out cash loans using their crypto holdings as collateral. This allows borrowers to quickly and easily access cash loans without the long waits or requirements of traditional lenders. Today, tis Stabilization feature shields your collateral from market downturns, preserving their value. That alone is a relatively unique perk, but it’s hardly all that SALT offers.

In addition to crypto-backed loans, SALT rewards users in a number of interesting ways — and for a few different reasons — including having a low loan-to-value ratio. Here’s what you should know about this crypto lending platform, including the pros, cons, and features it offers to users.

SALT Key Features

Over the years, SALT has added a number of unique features to the mix in addition to the crypto-backed loans it offers. This includes the SALT token, the platform’s native token, which gives users the ability to pay for memberships or take advantage of other perks on the platform. SALT offers these tokens as rewards to borrowers whose loan-to-value ratios are lower than average, which can be a huge benefit to users who want to earn for keeping their LTVs low.

• Stabilization:If the volatile market causes your LTV ratio to exceed 90.91% and your collateral value to drop, SALT won’t outright liquidate your collateral. Instead, it will convert your collateral to USDC to maintain value and offer the option to reenter your positions when the price increases. Stabilization fees are 5%, with a free first conversion, then following conversions are 1%.
• Security: SALT partners with Fireblocks, a digital asset management company that leans heavily into multiple layers of security to ensure asset protection. Furthermore, SALT has insurance against cyber incidents like data loss and theft.
• SALT Token:SALT is an ERC-20 token originally used for borrowers to gain membership to the lending platform, but now isn’t needed to take out a loan. Investors can use SALT tokens for up to 30% of their loan collateral, and pay for any fees using the platform.

How Does A SALT Loan Work?

To sign up for a SALT loan, head to the sign-up page to enter your email, set a password, verify your email, then input personal information and finalize the process. There is a KYC process, but to create an account, only your name, email, and location is required.

Next, you can set your loan amount, with any state restrictions in mind, and choose your collateral. Bitcoin, Ethereum, Litecoin, SALT, USDC, and USDT are all supported for collateral. You can set your LTV at 30%, 50%, or 70%, and your APR and loan repayment terms are adjusted accordingly based on if you are making interest-only payments or principal and interest payments. For example, a $150,000 loan at 50% LTV paid over one year with principal and interest payments requires $300,000 in collateral.

Minimum borrowing amounts start at $1,000, contingent on your location, and the platform offers two types of loans: personal and business. Loan rates vary, but can be extremely low for many borrowers, and the platform doesn’t charge any other fees. Borrowers will pay $0 for withdrawal fees, origination fees, custody fees, prepayment fees, or even bounced ACH fees. That keeps the cost of borrowing very low on this platform.

SALT Loan Details

SALT loans don't have many fees attached — in fact, the only fees you'll find are fees for stabilization during market downturns. Here's a breakdown of what you can expect from SALT:

The interest paid on SALT loans vary based on LTV, and terms. Here’s a breakdown of approximate rates you can expect on a SALT loan based on LTVs:

SALT Margin Calls

All crypto loans are subject to margin calls in a market downturn, and SALT's loan product is no different. Margin calls are triggered when your crypto assets decline in value, meaning your loan-to-value ratio goes up. Lenders like SALT give you the opportunity to add more collateral to your loan before they liquidate your loan collateral. SALT's margin call process works as follows:

• Once your loan hits a 75% LTV, you are issued your first margin call warning. SALT does not take any action at this point.
• Once your loan hits an 83.33% LTV, you are issued a formal margin call. You have 48 hours to return the loan to a 70% LTV, which can be done by paying down a portion of the loan, or adding more collateral in the form of additional crypto.
• Once your loan hits 90.91%, SALT will "stabilize" your loan collateral by converting your tokens to USDC. You will be hit with a 5% "stabilization fee" if this happens, so borrowers should attempt to avoid this outcome.

SALT Pros

There are a few different benefits that make SALT a standout in the crypto borrowing space, including:

Loans Are Easy To Access And Approval Is Quick

Unlike traditional loans, borrowers don’t have to wait long for loan approval on the SALT platform. If you have tokens to put up as collateral, chances are good that you can access a loan on this platform, especially since SALT doesn't require a credit check. All borrowers have to do is follow a few steps, put up their tokens as collateral on the loan, and then receive the funds they need to borrow. By cutting down on the laborious paperwork, the process of borrowing is a lot faster than it would be with a bank or credit union.

Low APRs And No Fees On Borrowing

When you borrow on the SALT platform, there are $0 fees for just about everything. You won’t pay anything for withdrawals, custody, prepayment, and you won’t even owe any fees if your ACH transfer bounces. Origination fees are set to 1%. That keeps borrowing costs cheap on this platform — and the interest rates for borrowing tend to be lower than average, too.

Rewards For Borrowers

One of the most unique perks of using SALT to borrow against your crypto is that borrowers have the opportunity to earn rewards on their loans. When users make payments, SALT rewards users with ETH, BTC, or USDC to use however they see fit. Borrowers can also use these rewards for making interest payments, topping off collateral, and more.

SALT Cons

In some cases, there may be a few downsides to using the SALT platform. The possible cons of using this platform include:

Crypto Used As Collateral Is Tied Up Temporarily

The SALT platform requires borrowers to put up collateral in return for their loans. This can make it easier to borrow cash from SALT, but your crypto assets will also be tied up while your loan is being paid off. What that means is that you won’t have access to your crypto if you need it during that time — which can cause a number of problems, including the possibility of losses due to a volatile market.

Requires Borrowers To Provide Personal Information

The SALT platform is centralized, which means that borrowers or users are required to provide certain types of identifying information to meet the Know Your Customer requirements that centralized platforms are held to. This verification process can take a while and can be relatively invasive, as it may require you to provide a copy of your ID, your Social Security number, and other personal information. It also means that crypto users who opt to borrow with this platform can’t be anonymous, which can be a big downside for some borrowers.

Who SALT Is Best For

Many people take out crypto loans for margin trading, but SALT loans are available for a variety of purposes. If you’re a passive investor who needs cash but don’t want to sell your Bitcoin or Ethereum holdings, a SALT loan lets you do so with little to no barriers. Here are the type of people who SALT would be best for:

• Crypto Investors With Low Credit Scores: Because SALT doesn’t require credit checks — just the right collateral — people with low credit scores can get rates comparable to traditional personal loans. Instead of paying high interest rates for a personal loan due to bad credit or no credit, users can enjoy better rates despite their credit.
• Crypto Loan Beginners: Investors holding Bitcoin or Ethereum will enjoy SALT's forgiving interest rates, fees, and LTV ratios. Furthermore, its stabilization feature can protect users’ assets against market dips and downturns, so beginners can convert their collateral to mitigate value losses.
• Investors With Large Unrealized Gains: If you've held coins like BTC or ETH for a long time and your investment value increased significantly, you can unlock that value through a SALT loan. Instead of selling your tokens and facing crypto taxes on those gains, you can use BTC or ETH as collateral and take out a cash loan against them instead, allowing you to access liquidity.
• Crypto Investors Looking To Purchase A Home: If you are unable to access a traditional home mortgage, you can use a loan from SALT in the fashion of a crypto mortgage. Borrowing cash against your crypto to acquire a home or rental property allows you to diversify your portfolio without needing to sell your crypto.

Alternatives To Consider

If you aren’t completely sold on SALT, there are a few alternatives to consider. DeFi lending protocols can allow borrowers to remain anonymous, while other CeFi platforms offer more than just lending products.

Compound: Good For DeFi Enthusiasts

If decentralized finance is more appealing, then picking DeFi lending protocol Compound for your crypto borrowing needs is a good option.Compound allows users to quickly borrow and repay crypto loans by simply connecting a compatible wallet. Furthermore, users can borrow more than just stablecoins with their collateral, as AAVE, BAT, ETH, and other major coins (except BTC) are available.

Nexo: Good For International Borrowing

Nexo allows users to borrow a variety of international currencies, including USD, Euro, and Canadian Dollar. Furthermore, there's a variety of supported assets for collateral, like BTC (50% LTV), ETH (50% LTV), USDT (90% LTV), and MATIC (33% LTV). There's tons of flexibility baked into Nexo loans since borrowers aren't stuck to a repayment schedule and they can repay in any currency. Like SALT, Nexo also doesn't require a credit check and quickly processes loans in under 24 hours. Unfortunately, Nexo's loan rates tend to be higher than SALT's.

Is SALT Right For You?

SALT can be right for you if you want flexible loan terms, LTV requirements, rebates back on your loan, and possible rate reductions during your loan. Furthermore, if potential market downturns make you nervous about your LTV crossing the threshold, SALT’s stabilization feature may save you from heavy losses and allow you to reenter your positions when the market is more to your liking. It’s definitely a solid option to consider if you have no or bad credit, since it doesn't require a credit check, and need cash for your BTC, ETH, LTC, and other holdings.

Final Thoughts On SALT

SALT sets itself apart from the competition by offering a full suite of loan features, partnerships with asset security firm Fireblocks, and flexible repayment options. Additionally, its interface and easy sign-up process makes it quick and simple to acquire a loan and get the cash needed to cover emergencies or fund a business.

Frequently Asked Questions