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The terminology surrounding loans can be quite difficult to understand, so below is a list of some definitions of the terminology we use throughout our Bitcoin Backed Loan product.


Origination fee - the origination fee is a fixed £2 fee that is charged by CoinCorner to facilitate the loan. This fee is included in the total loan amount.

Loan-to-value (LTV) - the initial loan-to-value is a percentage calculated at the start of your loan using the loan sum in relation to the value of bitcoin being locked as collateral. It is calculated as follows: (Loan Value / Collateral Value) x 100. If the LTV gets too high then this can trigger a margin or liquidation call to bring it back down to a healthy level.

Margin call - a margin call refers to the situation where the value of the collateral supporting the loan falls, causing the LTV to increase, which triggers a demand from CoinCorner for additional bitcoin to be put up or a loan repayment in order to reduce the LTV back to a healthy level.

Liquidation call - a liquidation call refers to the situation where the LTV increases to such a level that we have to sell a portion of the collateral bitcoin in order to bring the LTV back to a healthy level.

Collateral - collateral means the value of the bitcoin that is locked as security for a loan.

Interest rate - the interest rate is a cost of borrowing the loan sum expressed as a percentage of the amount borrowed. Our loans have a fixed interest rate of 5.5%.

Liquidate where the Bitcoin collateral is sold in order to reduce the LTV. Manual liquidations can be done by the user to free up some collateral if the LTV is low, and automatic liquidations will be done by CoinCorner if the LTV reaches a point where a liquidation call is required.

Repay - where a payment is made against the loan sum with fiat currency.

Top-up - where additional bitcoin is added as collateral as security for a loan. 


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