Some common terms you might need to know.
Collateral: The assets that are used to secure a loan. Unchained only accepts bitcoin to be used as collateral for its loans.
Principal: The amount borrowed. At Unchained, this also includes the origination fee.
Interest Rate: The amount paid to borrow the principal amount of the loan, expressed as an annual percentage rate.
APR: A measure of the cost of credit, which includes interest charged and other costs such as origination fees, expressed as a yearly rate.
Origination fee: The fee charged to originate a loan. Unchained includes this amount in the total amount borrowed, but it is not included in the total amount disbursed to the borrower.
CTP (collateral-to-principal) ratio: The figure used to measure the health of your loan’s collateral. It is calculated by dividing the USD value of the collateral by the loan’s principal balance. Unchained loans originate at a 250% CTP.
LTV (loan-to-value) ratio: The figure which states the proportion of the loan principal balance to the overall value of the collateral. It is the inverse of the collateral-to-principal ratio.
Margin call: The demand from a lender to a borrower to satisfy their margin obligations. Unchained begins issuing margin calls when a loan’s collateral-to-principal ratio decreases below 150%. See our margin call process.