Using Crypto Loans With OnLock: A Beginner’s Guide
Crypto offers alternatives to many traditional finance activities, including access to short-term liquidity. While the core idea is familiar — receiving funds for a fixed period and repaying them later — crypto loans work differently from bank-issued ones.
They allow users to access liquidity without selling their digital assets and come with fewer entry barriers. Below, we explain what crypto loans are, when they may be useful, and how platforms like OnLock by EMCD work.
What Are Crypto Loans?
Crypto loans allow users to receive funds by locking digital assets as collateral instead of selling them. These loans are typically easier to access than traditional bank loans and do not rely on credit history or banking relationships.
Most crypto loans are collateralized, meaning the borrower provides crypto assets to cover potential downside risk. In practice, this is similar to pawnbroker loans, except cryptocurrencies are used instead of traditional collateral like jewelry, a car, or other items.
Collateralized loans are the simplest, most common, and least risky option. While other types, such as flash loans, exist, they are mainly used by advanced traders as part of their strategies.
When Are Crypto Loans Useful?
Crypto-backed loans are popular among beginner and experienced users for several reasons:
- Access funds without selling crypto: A crypto loan can be a practical solution for Bitcoin (BTC) holders who need stablecoins or fiat money but don’t want to sell their assets. By using Bitcoin as collateral on EMCD OnLock, they can borrow Tether (USDT) stablecoins while keeping their position. This way, they can still benefit if the Bitcoin price goes up.
- Simplified access compared to traditional loans: Bank-issued loans often require extensive checks and approvals. With crypto loans, eligibility is primarily based on the value of the collateral rather than financial background.
- Use borrowed funds for other purposes: Borrowed assets can be used for staking, earning yield, or investing in other cryptocurrencies. Meanwhile, their original crypto remains locked as collateral.
Where to Get a Crypto Loan
Crypto loan providers generally fall into two categories:
- Centralized Finance (CeFi): These are company-operated services that manage the full loan process. They typically require account registration and identity verification, offer customer support, and provide fixed, transparent loan terms. OnLock, for example, is a part of the EMCD ecosystem, providing a simple entry point into crypto loans.
- Decentralized Finance (DeFi): These platforms operate via smart contracts without intermediaries. Users connect through wallets and interact directly with protocols. Loan conditions can change depending on market demand and protocol activity.
Borrowing Crypto with OnLock
OnLock is a crypto loan service by EMCD, a global platform for mining, saving, trading, and earning crypto since 2017. The service is designed to provide structured, short-term crypto-backed loans with clear parameters. Following the company's core principles, OnLock offers:
- Instant loans: Users can borrow USDT stablecoins by using Bitcoin, Ether (ETH), Solana (SOL), Dogecoin (DOGE), and several other major cryptocurrencies as collateral.
- High-level security: Collateral is stored in secure cold storage, protected from online threats. OnLock follows advanced security controls and never issues loans beyond its available reserves.
- Loan extension: Loans can be taken for 7, 14, 30, or 60 days. Before the term ends, users can extend it, providing more flexibility and avoiding unexpected closures.
- Fixed rates: The interest rate stays the same for the entire loan, so borrowers know in advance how much they will pay. Longer terms result in a higher total fee. When creating your loan application, you can enter the amount of collateral, select the loan term, and see exactly how much interest you will owe.
- Risk management: If crypto prices fall, collateral value can drop below the required level, triggering liquidation. OnLock helps prevent this with price alerts and regular reports, so borrowers can take action, adding more collateral or paying down the loan.
How to Get a Loan on OnLock
- Create an EMCD account: If you’re new to EMCD, register on the website or mobile app. You can sign up easily using a Google or Telegram account. Once your account is ready, select OnLock from the products section to start borrowing.
- Choose the terms: Pick which crypto to use as collateral and select the loan duration (7, 14, 30, or 60 days). The platform will automatically calculate how much you can borrow.
- Review Loan to Value (LTV): This metric shows how much you’re borrowing relative to the value of your collateral. For example, if you deposit Bitcoin worth $1,000 at 50% LTV, you can borrow $500 in USDT. Higher LTV requires less collateral but increases liquidation risk. If LTV exceeds 95%, the collateral may be liquidated. OnLock provides clear previews so you can see the risks and choose the option you’re comfortable with.
- Submit application and receive funds: Review the loan amount, collateral, term, and interest, then submit your application. The USDT, backed by your collateral, is usually credited within 15 minutes.
- Repay and unlock collateral: Pay back the USDT plus interest by the end of the term, and your collateral will be released.
Wrapping Up: What to Consider Before Borrowing
Choosing the right crypto loan means balancing cost, risk, and your financial goals. Before borrowing, review key factors such as collateral requirements, LTV, and platform security. OnLock by EMCD offers clear terms, strong security, and flexibility, making it a reliable option for accessing liquidity while keeping your crypto.
