ICCL 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 ICCL 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 ICCL for shorter-term funding (sometimes referred to as a bridge loan).
With ICCL, 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. ICCL’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 ICCL 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 ICCL back once that deal has closed.
Other clients will use the funds to help start their business. A ICCL 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, ICCL’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. ICCL 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. ICCL is the only crypto backed lender with institutional backing from investors and institutional-quality custody partners. Click here to learn more about collateralized loans.